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Goodwill and other intangible assets
 12 Months Ended
Aug. 31, 2021
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.

Based on the annual evaluation as of the June 1, 2021 valuation date, the fair values of the Company’s reporting units exceeded their carrying amounts ranging from approximately 18% to approximately 195%. Boots reporting unit's fair value was in excess of its carrying value by approximately 18%, compared to a nominal amount as of June 1, 2020, mainly due to decline in the carrying amounts of net assets of the reporting unit. Other international reporting unit's fair value was in excess of its carrying value by approximately 29% compared to 4% as of June 1, 2020, due to improvement in business conditions of the countries within the reporting unit. As of August 31, 2021, the carrying values of goodwill were $1.1 billion and $0.4 billion for Boots reporting unit and Other international reporting unit, respectively.

During the fiscal year ended August 31, 2021 the Company recorded an impairment of $49 million on certain indefinite-lived Boots tradename assets. The fair values of indefinite-lived intangibles within the Boots reporting unit exceeded their carrying value amounts ranging from approximately 5% to approximately 27%, except for certain Boots indefinite lived Boots tradename assets which were impaired during the year. As of August 31, 2021 and August 31, 2020, the carrying value of the indefinite-lived intangibles within the Boots reporting unit was $7.3 billion and $7.2 billion, respectively.

During the fiscal year ended August 31, 2020, the Company completed a quantitative impairment analysis for goodwill and certain indefinite-lived intangible assets related to its two reporting units within the International segment, 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.

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 with respect to 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 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 an impairment charge of $47 million. No impairment was recorded for definite-lived intangibles in the year ended August 31, 2021.

Changes in the carrying amount of goodwill by reportable segment consist of the following activity (in millions):
Goodwill rollforward:United StatesInternationalWalgreens Boots Alliance, Inc.
August 31, 2019$10,491 $3,051 $13,542 
Acquisitions 1
62 — 62 
Impairment— (1,675)(1,675)
Currency translation adjustments— 83 83 
August 31, 2020$10,553 $1,460 $12,013 
Acquisitions 2
$394 $21 $414 
Currency translation adjustments— (7)(7)
August 31, 2021$10,947 $1,474 $12,421 
1    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.
2    During the fiscal year ended August 31, 2021, the Company acquired a controlling equity interest in Innovation Associates, Inc. and a joint venture with McKesson which resulted in an increase to goodwill of $394 million and $21 million, respectively.
The carrying amount and accumulated amortization of intangible assets consist of the following (in millions):
Intangible assets:August 31, 2021August 31, 2020
Gross amortizable intangible assets  
Customer relationships and loyalty card holders 1
$3,522 $3,502 
Tradenames and trademarks361 348 
Purchasing and payer contracts317 337 
Others 2
221 60 
Total gross amortizable intangible assets$4,421 $4,247 
Accumulated amortization 
Customer relationships and loyalty card holders 1
$1,335 $1,089 
Tradenames and trademarks226 196 
Purchasing and payer contracts227 95 
Others 2
37 26 
Total accumulated amortization1,826 1,406 
Total amortizable intangible assets, net$2,595 $2,841 
Indefinite-lived intangible assets  
Tradenames and trademarks$5,276 $5,203 
Pharmacy licenses2,066 2,028 
Total indefinite-lived intangible assets$7,342 $7,231 
Total intangible assets, net$9,936 $10,072 
1Includes purchased prescription files.
2Includes acquired developed technology and non-compete agreements.

Amortization expense for intangible assets was $523 million, $384 million and $473 million in fiscal 2021, 2020 and 2019, respectively.

Estimated future annual amortization expense for the next five fiscal years for intangible assets recorded at August 31, 2021 is as follows (in millions):
 20222023202420252026
Estimated annual amortization expense$444 $330 $311 $276 $258