10-K FY 2022 FINAL MOOG Inc - Flipbook - Page 50
Table of Contents
Impairment of Long-Lived Assets: Long-lived assets, including acquired identifiable intangible assets, are reviewed
for impairment whenever events or changes in circumstances indicate that the carrying amount of those assets may
not be recoverable. We use undiscounted cash flows to determine whether impairment exists and measure any
impairment loss using discounted cash flows.
In 2022, we recorded impairment charges on long-lived assets in our Aircraft Controls and Industrial Systems
segment. These charges relate to property, plant and equipment that experienced a significant decline in value due to
the slower than expected recovery of our commercial aircraft business. In addition, we recorded impairment charges
on intangible assets associated with a product line we are no longer pursuing. These charges are included in asset
impairment in the Consolidated Statements of Earnings.
In 2021, we recorded impairment charges on long-lived assets in our Space and Defense Controls segment. These
charges relate to property, plant and equipment and intangibles assets that experienced a decline in value. These
charges are included in asset impairment in the Consolidated Statements of Earnings.
In 2020, we recorded impairment charges on long-lived assets primarily in our Aircraft Controls and Industrial Systems
segments. These charges relate to property, plant and equipment, right-of-use-assets and intangible assets that
experienced significant decline in value due to economic impacts of the COVID-19 pandemic. These charges are
included in asset impairment in the Consolidated Statements of Earnings.
See Note 4 - Receivables, Note 5 - Inventories, Note 6 - Property, Plant and Equipment, Note 7 - Leases, Note 8 Goodwill and Intangible Assets and Note 12 - Fair Value for additional disclosures relating to impairment charges
recorded.
Product Warranties: In the ordinary course of business, we warrant our products against defect in design, materials
and workmanship typically over periods ranging from twelve to sixty months. We determine warranty reserves needed
by product line based on historical experience and current facts and circumstances.
Financial Instruments: Our financial instruments consist primarily of cash and cash equivalents, restricted cash,
receivables, notes payable, accounts payable, long-term debt, interest rate swaps and foreign currency contracts. The
carrying values for our financial instruments approximate fair value with the exception at times of long-term debt. We
do not hold or issue financial instruments for trading purposes.
We carry derivative instruments on the Consolidated Balance Sheets at fair value, determined by reference to quoted
market prices. The accounting for changes in the fair value of a derivative instrument depends on whether it has been
designated and qualifies as part of a hedging relationship and, if so, the reason for holding it. Our use of derivative
instruments is generally limited to cash flow hedges of certain interest rate risks and minimizing foreign currency
exposure on foreign currency transactions, which are typically designated in hedging relationships, and intercompany
balances, which are not designated as hedging instruments. Cash flows resulting from forward contracts are
accounted for as hedges of identifiable transactions or events and classified in the same category as the cash flows
from the items being hedged.
Reclassifications: Certain prior year amounts have been reclassified to conform to current year's presentation, which
management does not consider to be material.
Recent Accounting Pronouncements:
Recent Accounting Pronouncements Adopted
There have been no accounting pronouncements adopted for the year ended October 1, 2022.
Recent Accounting Pronouncements Not Yet Adopted
We consider the applicability and impact of all Accounting Standard Updates ("ASU"). ASUs not listed were assessed
and determined to be either not applicable, or had or are expected to have an immaterial impact on our financial
statements and related disclosures.
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