INTANGIBLE ASSETS AND GOODWILL

12 Months Ended

May 31, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

7.	INTANGIBLE ASSETS AND GOODWILL

The changes in intangible assets for fiscal 2017 and the net book value of intangible assets as of May 31, 2017 and 2016 were as follows:

	Intangible Assets, Gross									Accumulated Amortization											Intangible Assets, Net				Weighted Average
(Dollars in millions)	May 31, 2016		Additions		Retirements			May 31, 2017		May 31, 2016			Expense			Retirements		May 31, 2017			May 31, 2016		May 31, 2017		Useful Life⁽¹⁾
Developed technology	$	3,661	$	1,977	$	(241	)	$	5,397	$	(1,876	)	$	(660	)	$	241	$	(2,295	)	$	1,785	$	3,102	5 years
SaaS, PaaS and IaaS agreements and related relationships		2,034		2,084		(13	)		4,105		(704	)		(398	)		13		(1,089	)		1,330		3,016	7 years
Software support agreements and related relationships		2,419		—		(854	)		1,565		(1,287	)		(126	)		854		(559	)		1,132		1,006	N.A.
Other		3,452		126		(1,580	)		1,998		(2,756	)		(267	)		1,580		(1,443	)		696		555	7 years
Total intangible assets, net	$	11,566	$	4,187	$	(2,688	)	$	13,065	$	(6,623	)	$	(1,451	)	$	2,688	$	(5,386	)	$	4,943	$	7,679	6 years

⁽¹⁾	Represents weighted-average useful lives of intangible assets acquired during fiscal 2017.

Total amortization expense related to our intangible assets was $1.5 billion, $1.6 billion and $2.1 billion in fiscal 2017, 2016 and 2015, respectively. As of May 31, 2017, estimated future amortization expenses related to intangible assets were as follows (in millions):

Fiscal 2018	$	1,588
Fiscal 2019		1,419
Fiscal 2020		1,219
Fiscal 2021		1,050
Fiscal 2022		947
Thereafter		1,456
Total intangible assets, net	$	7,679

The changes in the carrying amounts of goodwill, net, which is generally not deductible for tax purposes, for our operating segments for fiscal 2017 and 2016 were as follows:

(in millions)	Cloud and On-Premise Software			Hardware			Services		Total Goodwill, net
Balances as of May 31, 2015	$	29,830		$	2,370		$	1,887	$	34,087
Goodwill from acquisitions		518			—			—		518
Goodwill adjustments, net⁽¹⁾		(12	)		(3	)		—		(15	)
Balances as of May 31, 2016		30,336			2,367			1,887		34,590
Goodwill from acquisitions		8,543			—			—		8,543
Goodwill adjustments, net⁽¹⁾		(88	)		—			—		(88	)
Balances as of May 31, 2017	$	38,791		$	2,367		$	1,887	$	43,045

⁽¹⁾

Pursuant to our business combinations accounting policy, we recorded goodwill adjustments for the effects on goodwill of changes to net assets acquired during the period that such a change is identified, provided that any such change is within the measurement period (up to one year from the date of the acquisition).

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details