In the second quarter of 2022, both Townsquare Media and Beasley Media Group took impairment charges. For Townsquare, which positions itself as a digital-first local media company, a $9.42 million impairment charge taken in the quarter. At Beasley, an $8.6 million non-cash impairment loss was seen, impacting an operating loss for the audio content creation and distribution company in Q2 ’22.
Beasley pointed out that the impairment charge was taken “due to an increase in the discount rate used in the analyses to estimate the fair value of FCC licenses and goodwill in a rising interest rate environment.” But, what exactly does that mean? And, is it considered a negative when it has no direct connection to the revenue and income generated from a company’s business in a fiscal quarter?