Notes to Financial Statements
NOTE 9 — GOODWILL
Changes in the carrying amount of goodwill were as follows:
|
(In millions) |
|
|
June 30, 2020 |
|
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|
Acquisitions |
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Other |
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June 30, 2021 |
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Acquisitions |
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Other |
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|
June 30, |
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|
Productivity and Business Processes |
|
$ |
24,190 |
|
|
$ |
0 |
|
|
$ |
127 |
|
|
$ |
24,317 |
|
|
$ |
599 |
|
|
$ |
(105 |
) |
|
|
$ |
24,811 |
|
|
Intelligent Cloud |
|
|
12,697 |
|
|
|
505 |
|
|
|
54 |
|
|
|
13,256 |
|
|
|
16,879 |
(b) |
|
|
47 |
|
(b) |
|
|
30,182 |
|
|
More Personal Computing |
|
|
6,464 |
|
|
|
5,556 |
(a) |
|
|
118 |
(a) |
|
|
12,138 |
|
|
|
648 |
|
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|
(255 |
) |
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|
12,531 |
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Total |
|
$ |
43,351 |
|
|
$ |
6,061 |
|
|
$ |
299 |
|
|
$ |
49,711 |
|
|
$ |
18,126 |
|
|
$ |
(313 |
) |
|
|
$ |
67,524 |
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(a) |
Includes goodwill of $5.5 billion related to ZeniMax. See Note 8 – Business Combinations for further information. |
|
(b) |
Includes goodwill of $16.3 billion related to Nuance. See Note 8 – Business Combinations for further information. |
The measurement periods for the valuation of assets acquired and liabilities assumed end as soon as information on the facts and circumstances that existed as of the acquisition dates becomes available, but do not exceed 12 months. Adjustments in purchase price allocations may require a change in the amounts allocated to goodwill during the periods in which the adjustments are determined.
Any change in the goodwill amounts resulting from foreign currency translations and purchase accounting adjustments are presented as “Other” in the table above. Also included in “Other” are business dispositions and transfers between segments due to reorganizations, as applicable.
Goodwill Impairment
We test goodwill for impairment annually on May 1 at the reporting unit level, primarily using a discounted cash flow methodology with a peer-based, risk-adjusted weighted average cost of capital. We believe use of a discounted cash flow approach is the most reliable indicator of the fair values of the businesses.
No instances of impairment were identified in our May 1, 2022, May 1, 2021, or May 1, 2020 tests. As of June 30, 2022 and 2021, accumulated goodwill impairment was $11.3 billion.
