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Goodwill and other intangible assets
 12 Months Ended
Aug. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and other intangible assets Goodwill and other intangible assets
Goodwill and indefinite-lived intangible assets are evaluated for impairment annually during the fourth quarter, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit or intangible asset below its carrying value. During the three months ended May 31, 2020, the Company completed a quantitative impairment analysis for goodwill and certain indefinite-lived intangible assets related to its two reporting units within Retail Pharmacy International division, Boots and Other international, as a result of the significant impact of COVID-19 on their financial performance. Based on this analysis, the Company recorded impairment charges of $1.7 billion on Boots goodwill and $0.3 billion on certain indefinite-lived Boots tradename assets.

Based on the annual evaluation as of June 1, 2020 valuation date, the fair values of the Company’s reporting units exceeded their carrying amounts ranging from approximately 4% to approximately 239% excluding Boots reporting unit for which the excess of fair value over carrying amount was nominal due to an impairment charge recognized during the three months ended May 31, 2020. Other international reporting unit's fair value was in excess of its carrying value by approximately 4% compared to 16% on June 1, 2019. As of August 31, 2020, the carrying values of goodwill were $1.1 billion and $0.5 billion for Boots reporting unit and Other international reporting unit, respectively. The fair values of certain indefinite-lived intangibles within the Boots reporting unit exceeded their carrying amounts ranging from approximately 4% to approximately 31%, excluding certain indefinite-lived Boots tradename assets for which the excess of fair values over carrying amounts were nominal due to impairment charges recognized during the three months ended May 31, 2020. As of August 31, 2020, the carrying value of the indefinite-lived intangibles within the Boots reporting unit was $7.2 billion.

During the fiscal year ended August 31, 2019, the Company recorded an impairment of $73 million on its pharmacy licenses in the Boots reporting unit.

As part of the Company’s impairment analysis, fair value of a reporting unit is determined using both the income and market approaches. The income approach requires management to estimate a number of factors for each reporting unit, including the projected future operating results, economic projections, anticipated future cash flows and discount rates considering the impact of COVID-19, among other potential impacts. The market approach estimates fair value using comparable marketplace fair value data from within a comparable industry grouping.
The determination of the fair value of the reporting units requires the Company to make significant estimates and assumptions including the business and financial performance of the Company’s reporting units, as well as how such performance may be impacted by COVID-19. These estimates and assumptions primarily include, but are not limited to: the selection of appropriate peer group companies, control premiums appropriate for acquisitions in the industries in which we compete, discount rates, terminal growth rates, and forecasts of revenue, operating income, depreciation, amortization and capital expenditures, including considering the impact of COVID-19.

Indefinite-lived intangible assets fair values are estimated using the relief from royalty method and excess earnings method of the income approach. The determination of the fair value of the indefinite-lived intangibles requires the Company to make significant estimates and assumptions. These estimates and assumptions primarily include, but are not limited to: forecasts of revenue, the selection of appropriate royalty rate and discount rates.

Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions, including the impact of COVID-19, could have a significant impact on either the fair value of the reporting units and indefinite-lived intangibles, the amount of any goodwill and indefinite-lived intangible impairment charges, or both. These estimates can be affected by a number of factors including, but not limited to, the impact of COVID-19, its severity, duration and its impact on global economies, general economic conditions as well as our profitability. The Company will continue to monitor these potential impacts, including the impact of COVID-19 and economic, industry and market trends and the impact these may have on Boots and Other international reporting units.

Definite-lived intangible assets are evaluated for impairment whenever events or circumstances indicate that a certain asset or asset group may be impaired. During the year ended August 31, 2020, the Company evaluated certain definite-lived intangibles for impairment resulting in impairment charge of $47 million.

Changes in the carrying amount of goodwill by reportable segment consist of the following activity (in millions):
 Retail Pharmacy USARetail Pharmacy InternationalPharmaceutical WholesaleWalgreens Boots Alliance, Inc.
August 31, 2018$10,483 $3,370 $3,061 $16,914 
Acquisitions8 — — 8 
Dispositions— (9)— (9)
Currency translation adjustments— (182)(171)(353)
August 31, 2019$10,491 $3,179 $2,890 $16,560 
Acquisitions$62 $— $— $62 
Impairment— (1,675)— (1,675)
Currency translation adjustments— 90 231 321 
August 31, 2020$10,553 $1,593 $3,122 $15,268 

During the fiscal year ended August 31, 2020, the Company acquired the remaining two of three Rite Aid distribution centers including related inventory for cash consideration of $91 million resulting in an increase to goodwill of $62 million. During fiscal year ended August 31, 2019, the Company completed the analysis to assign fair values for assets acquired and liabilities assumed for the 1,932 Rite Aid stores acquired in fiscal 2018 resulting in a decrease to goodwill of $13 million. See note 2, acquisitions, for additional information.
The carrying amount and accumulated amortization of intangible assets consists of the following (in millions):
 August 31, 2020August 31, 2019
Gross amortizable intangible assets  
Customer relationships and loyalty card holders1
$4,389 $4,290 
Favorable lease interests and non-compete agreements2
61 654 
Trade names and trademarks410 461 
Purchasing and payer contracts337 382 
Total gross amortizable intangible assets5,197 5,787 
Accumulated amortization 
Customer relationships and loyalty card holders1
$1,511 $1,262 
Favorable lease interests and non-compete agreements2
26 410 
Trade names and trademarks228 250 
Purchasing and payer contracts95 99 
Total accumulated amortization1,860 2,021 
Total amortizable intangible assets, net$3,337 $3,766 
Indefinite-lived intangible assets  
Trade names and trademarks$5,388 $5,232 
Pharmacy licenses2,028 1,878 
Total indefinite-lived intangible assets$7,416 $7,110 
Total intangible assets, net$10,753 $10,876 
1Includes purchased prescription files.
2Transferred favorable lease interest to right-of-use assets upon adoption of ASC 842. Refer to note 1, summary of major accounting policies for additional information.

Amortization expense for intangible assets was $461 million, $552 million and $493 million in fiscal 2020, 2019 and 2018, respectively.

Estimated future annual amortization expense for the next five fiscal years for intangible assets recorded at August 31, 2020 is as follows (in millions):
 20212022202320242025
Estimated annual amortization expense$445 $426 $391 $371 $336