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Goodwill and Other Intangibles
 9 Months Ended
Jun. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangibles

NOTE G – GOODWILL AND OTHER INTANGIBLES

Goodwill

Ashland tests goodwill and other indefinite-lived intangible assets for impairment annually as of July 1 and when events and circumstances indicate an impairment may have occurred. Ashland tests goodwill and other indefinite-lived intangible assets for impairment by comparing the estimated fair value of the reporting units (for goodwill) and other indefinite-lived intangible assets to the related carrying value. If the carrying amount of a reporting unit or other indefinite-lived intangible asset exceeds its estimated fair value, Ashland records an impairment loss based on the difference between fair value and carrying amount, not to exceed the associated carrying amount of goodwill per reporting unit.

No indicators of impairment were identified in the three and nine months ended June 30, 2022.

Ashland’s assessment of an impairment on any of these assets classified currently as having indefinite lives, including goodwill, could change in future periods if significant events happen and/or circumstances change that effect the previously mentioned assumptions such as: a significant change in projected business results, a divestiture decision, increase in Ashland’s weighted-average cost of capital rates, decrease in growth rates or assumptions, economic deterioration that is more severe or of a longer duration than anticipated, or another significant economic event.

The following is a progression of goodwill by reportable segment for the nine months ended June 30, 2022.

 

 

Life

 

 

Personal

 

 

Specialty

 

 

 

 

 

 

 

(In millions)

Sciences

 

 

Care (a)

 

 

Additives (a)

 

 

Intermediates (a)

 

 

Total

 

Balance at September 30, 2021

$

856

 

 

$

129

 

 

$

445

 

 

$

—

 

 

$

1,430

 

Currency translation

 

(44

)

 

 

(7

)

 

 

(23

)

 

 

—

 

 

 

(74

)

Balance at June 30, 2022

$

812

 

 

$

122

 

 

$

422

 

 

$

—

 

 

$

1,356

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
(a)
As of June 30, 2022 and September 30, 2021, there were accumulated impairments of $356 million, $174 million and $90 million related to the Personal Care, Specialty Additives and Intermediates reportable segments, respectively.

Other intangible assets

Intangible assets principally consist of trademarks and trade names, intellectual property and customer and supplier relationships. Intangible assets classified as finite are amortized on a straight-line basis over their estimated useful lives. The cost of trademarks and trade names is amortized principally over 3 to 25 years, intellectual property over 5 to 25 years, and customer and supplier relationships over 3 to 24 years.

Ashland annually reviews, as of July 1, indefinite-lived intangible assets for possible impairment or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable.

No indicators of impairment were identified in the three and nine months ended June 30, 2022.

Intangible assets were comprised of the following as of June 30, 2022 and September 30, 2021.

 

 

June 30, 2022

 

 

Gross

 

 

 

 

 

Net

 

 

carrying

 

 

Accumulated

 

 

carrying

 

(In millions)

amount

 

 

amortization

 

 

amount

 

Definite-lived intangibles

 

 

 

 

 

 

 

 

Trademarks and trade names

$

97

 

 

$

(36

)

 

$

61

 

Intellectual property

 

730

 

 

 

(519

)

 

 

211

 

Customer and supplier relationships

 

820

 

 

 

(369

)

 

 

451

 

Total definite-lived intangibles

 

1,647

 

 

 

(924

)

 

 

723

 

 

 

 

 

 

 

 

 

 

Indefinite-lived intangibles

 

 

 

 

 

 

 

 

Trademarks and trade names

 

278

 

 

 

—

 

 

 

278

 

Total intangible assets

$

1,925

 

 

$

(924

)

 

$

1,001

 

 

 

 

September 30, 2021

 

 

Gross

 

 

 

 

 

Net

 

 

carrying

 

 

Accumulated

 

 

carrying

 

(In millions)

amount

 

 

amortization

 

 

amount

 

Definite-lived intangibles

 

 

 

 

 

 

 

 

Trademarks and trade names

$

101

 

 

$

(32

)

 

$

69

 

Intellectual property

 

750

 

 

 

(495

)

 

 

255

 

Customer and supplier relationships

 

849

 

 

 

(352

)

 

 

497

 

Total definite-lived intangibles

 

1,700

 

 

 

(879

)

 

 

821

 

 

 

 

 

 

 

 

 

 

Indefinite-lived intangibles

 

 

 

 

 

 

 

 

Trademarks and trade names

 

278

 

 

 

—

 

 

 

278

 

Total intangible assets

$

1,978

 

 

$

(879

)

 

$

1,099

 

 

Amortization expense recognized on intangible assets was $23 million for the three months ended June 30, 2022 and 2021, respectively, and $71 million and $65 million for the nine months ended June 30, 2022 and 2021, respectively, and is included in the intangibles amortization expense caption of the Statements of Consolidated Comprehensive Income (Loss). Estimated amortization expense for future periods is $96 million in 2022 (includes nine months actual and three months estimated), $96 million in 2023, $80 million in 2024, $75 million in 2025 and $72 million in 2026. Actual amounts may change from such estimated amounts due to fluctuations in foreign currency exchange rates, additional intangible asset acquisitions and divestitures, potential impairment, accelerated amortization, or other events.