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Intangible Assets
12 Months Ended
Sep. 30, 2011
Intangible Assets [Abstract]  
Intangible Assets

6. Intangible Assets

Intangible assets include acquired technology, customer relationships, trademarks and trade-names and other intangibles. Intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the assets, which range from five to fifteen years.

The Company's intangible assets consist of:

 

In millions

   Acquired
technology
and
patents
    Customer
relationships
and other
intangibles
    Trademarks
and trade
names
    Total  

Gross Carrying Amount

   $ 1,371      $ 2,258      $ 545      $ 4,174   

Accumulated Amortization

     (777     (604     —          (1,381

Accumulated Impairment

     —          —          (190     (190
  

 

 

   

 

 

   

 

 

   

 

 

 

September 30, 2010

   $ 594      $ 1,654      $ 355      $ 2,603   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross Carrying Amount

   $ 1,366      $ 2,261      $ 545      $ 4,172   

Accumulated Amortization

     (1,025     (828     —          (1,853

Accumulated Impairment

     —          —          (190     (190
  

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of September 30, 2011

   $ 341      $ 1,433      $ 355      $ 2,129   
  

 

 

   

 

 

   

 

 

   

 

 

 

Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Intangible assets determined to have indefinite useful lives are not amortized but are tested for impairment annually, or more frequently if events or changes in circumstances indicate the asset may be impaired.

 

The Company's trademarks and trade names are expected to generate cash flows indefinitely. Consequently, these assets were classified as indefinite-lived intangibles and accordingly are not amortized but reviewed for impairment annually, or sooner under certain circumstances. Prior to the goodwill testing discussed above, the Company tested its intangible assets with indefinite lives in accordance with ASC 360. ASC 360 requires that the fair value of intangible assets with indefinite lives be compared to the carrying value of those assets. In situations where the carrying value exceeds the fair value of the intangible asset, an impairment loss equal to the difference is recognized. The Company estimates the fair value of its indefinite-lived intangible assets using an income approach; specifically, based on discounted cash flows.

September 30, 2011, 2010 and 2009

At September 30, 2011, 2010 and 2009, the Company performed annual tests of recoverability of indefinite-lived intangible assets. The Company determined that the respective book values of the Company's indefinite-lived intangible assets did not exceed their estimated fair values and that it was not necessary to record impairment charges.

March 31, 2009

The Company determined that the continued deterioration in the business climate discussed above was also an indicator requiring the interim testing of its long-lived assets and performed the appropriate testing as of March 31, 2009.

The estimated fair values of the Company's indefinite-lived intangible assets using the discounted cash flows model was $355 million and accordingly, the Company recorded an impairment charge of $60 million related to trademark and trade name indefinite-lived intangible assets during the three months ended March 31, 2009. The impairment is predominantly the result of the weakness in the global economy that existed at that time. The reduced valuation of these intangible assets reflects the additional market risks, higher discount rates and the lower sales forecasts associated with these indefinite-lived intangible assets consistent with economic trends that existed at that time.

Future amortization expense of intangible assets for the years ending September 30 is as follows:

 

In millions

   Estimated  future
amortization expense
 
  

2012

     409   

2013

     277   

2014

     266   

2015

     243   

2016 and thereafter

     579   
  

 

 

 

Total

   $ 1,774