MDT · 10-Q · 2026Q3 · Full report

Goodwill Impairment Risk

Medtronic plc · 2026-09-03 · Importance 61 · Surprise 32

Medtronic’s fiscal 2026 annual impairment analysis found that the Medical Surgical reporting unit’s estimated fair value exceeded its carrying value by approximately 12%, with $19.7 billion of goodwill allocated to the unit as of July 31, 2026. A 1% increase in the discount rate would reduce the reporting units’ fair-value cushions to approximately 3%–307%, while a 5% decrease in projected cash flows and market-based revenue and earnings would reduce them to approximately 7%–313%. The valuation is sensitive to projected revenue, earnings, cash flows, discount rates, competitive conditions, regulatory approval timing, clinical-trial results, worldwide economic conditions, and currency exchange rates.

Key facts

• If the discount rate was to increase 1%, the approximate percentage by which the fair value exceeds the carrying value would range from 3% to 307%. source
• If the future cash flows in the income approach and revenue and earnings in the market approach were to decrease by 5%, the approximate percentage by which the fair value exceeds the carrying value would range from 7% to 313%. source
• Based on the quantitative test, the Medical Surgical reporting unit had an estimated fair value that exceeded its carrying value, including goodwill, by approximately 12% as of July 31, 2026. source
• As of July 31, 2026, $19.7 billion of goodwill was allocated to the Medical Surgical reporting unit. source
• Goodwill and indefinite lived intangible assets are tested for impairment annually in the third quarter of the fiscal year and whenever an event occurs or circumstances change that would indicate the carrying amount may be impaired. source
• The remaining reporting units' fair values materially exceeded their carrying values as of the annual impairment test. source
• The approximate percentage by which the fair value exceeds the carrying value based on the annual impairment test ranged from 12% to 335%. source
• As part of the annual impairment analysis in the third quarter of fiscal year 2026, Medtronic plc completed a quantitative impairment analysis of all of its reporting units. source