8. Goodwill

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For the purposes of impairment testing, goodwill is allocated to the Company’s reporting units as follows:

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The recoverable amounts for each reporting unit are based on fair value, using an income approach. Where applicable, the Company uses its comparative market multiples to corroborate discounted cash flow results. The fair value measurement was categorized as a Level 3 based on inputs in the valuation technique used. The key assumptions used in the calculation of the fair value of each reporting unit include management’s projections of future cash flows for a period of the next five years. Other key assumptions include a terminal value, growth rate and discount rate based on the estimated weighted average cost of capital that incorporates the risks specific to the reporting units.

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The Company conducted annual testing of its goodwill as of December 31, 2024 and determined that the carrying value of its reporting unit, Jupiter, did not exceed its fair value.

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The Company conducted annual testing of its goodwill as of December 31, 2023 and determined that the carrying value of its Standard Farms PA reporting unit exceeded its fair value.

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The following tables detail the key assumptions used in determining the recoverable amounts as of December 31, 2024 and 2023:

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(1) Reflects estimated compound annual revenue growth over the next five years.

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Based on the test results for Jupiter as of December 31, 2024, the fair value exceeded its carrying value, and no impairment loss was recorded.

Based on the test results for Jupiter and Standard Farms PA as of December 31, 2023, the carrying amount of Standard Farms PA exceeded its fair value by $3,030. Consequently, an impairment loss of $3,030 was booked to Standard Farms PA. The fair value of Jupiter exceeded its carrying value, and no impairment loss was recorded related to this reporting unit.