Tesla, Inc. Goodwill & Intangibles Disclosure
Note 4 – Goodwill and Intangible Assets
Goodwill increased $9 million within the automotive segment from $198 million as of December 31, 2019 to $207 million as of December 31, 2020 due to completed business combinations and foreign currency translation adjustments during the year ended December 31, 2020. There were no accumulated impairment losses as of December 31, 2020 and 2019.
Information regarding our intangible assets including assets recognized from our acquisitions was as follows (in millions):
|
|
|
December 31, 2020 |
|
|
December 31, 2019 |
|
||||||||||||||||||||||||||
|
|
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Other |
|
|
Net Carrying Amount |
|
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Other |
|
|
Net Carrying Amount |
|
||||||||
|
Finite-lived intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Developed technology |
|
$ |
302 |
|
|
$ |
(111 |
) |
|
$ |
3 |
|
|
$ |
194 |
|
|
$ |
291 |
|
|
$ |
(72 |
) |
|
$ |
1 |
|
|
$ |
220 |
|
|
Trade names |
|
|
3 |
|
|
|
(1 |
) |
|
|
— |
|
|
|
2 |
|
|
|
3 |
|
|
|
(1 |
) |
|
|
1 |
|
|
|
3 |
|
|
Favorable contracts and leases, net |
|
|
113 |
|
|
|
(32 |
) |
|
|
— |
|
|
|
81 |
|
|
|
113 |
|
|
|
(24 |
) |
|
|
— |
|
|
|
89 |
|
|
Other |
|
|
38 |
|
|
|
(18 |
) |
|
|
1 |
|
|
|
21 |
|
|
|
38 |
|
|
|
(16 |
) |
|
|
— |
|
|
|
22 |
|
|
Total finite-lived intangible assets |
|
|
456 |
|
|
|
(162 |
) |
|
|
4 |
|
|
|
298 |
|
|
|
445 |
|
|
|
(113 |
) |
|
|
2 |
|
|
|
334 |
|
|
Indefinite-lived intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gigafactory Nevada water rights |
|
|
15 |
|
|
|
— |
|
|
|
— |
|
|
|
15 |
|
|
|
5 |
|
|
|
— |
|
|
|
— |
|
|
|
5 |
|
|
In-process research and development ("IPR&D") |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
60 |
|
|
|
— |
|
|
|
(60 |
) |
|
|
— |
|
|
Total infinite-lived intangible assets |
|
|
15 |
|
|
|
— |
|
|
|
— |
|
|
|
15 |
|
|
|
65 |
|
|
|
— |
|
|
|
(60 |
) |
|
|
5 |
|
|
Total intangible assets |
|
$ |
471 |
|
|
$ |
(162 |
) |
|
$ |
4 |
|
|
$ |
313 |
|
|
$ |
510 |
|
|
$ |
(113 |
) |
|
$ |
(58 |
) |
|
$ |
339 |
|
Amortization expense during the years ended December 31, 2020, 2019 and 2018 was $51 million, $44 million and $66 million, respectively.
Total future amortization expense for finite-lived intangible assets was estimated as follows (in millions):
|
2021 |
|
|
$ |
51 |
|
|
2022 |
|
|
|
50 |
|
|
2023 |
|
|
|
44 |
|
|
2024 |
|
|
|
29 |
|
|
2025 |
|
|
|
29 |
|
|
Thereafter |
|
|
|
95 |
|
|
Total |
|
|
$ |
298 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2020 | Feb 8, 2021 | Showing above |
| 2019 | Feb 13, 2020 | |
| 2017 | Feb 23, 2018 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.