Goodwill and Intangible Assets, Net

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

6. Goodwill and Intangible assets, net

The changes in the net carrying amount of goodwill are as follows (in millions):


	Predecessor
	Employer		Professional
	Solutions		Services		Total
Balance as of December 31, 2020	$	1,985	$	260	$	2,245
Measurement period adjustments		2		—		2
Foreign currency translation		2		1		3
Balance as of June 30, 2021	$	1,989	$	261	$	2,250

	Successor
	Employer		Professional
	Solutions		Services		Total
Balance as of July 1, 2021	$	3,309	$	74	$	3,383
Acquisitions		255		—		255
Balance as of December 31, 2021	$	3,564	$	74	$	3,638

The Company did not identify any impairment for the Successor period from July 1, 2021 to December 31, 2021, or the Predecessor period December 31, 2020 to June 30, 2021. Goodwill is reviewed for impairment utilizing a qualitative assessment or a quantitative goodwill impairment test and the Company determined that it was more likely than not that no impairment of goodwill existed as of the evaluation date.

Intangible assets by asset class are as follows (in millions):


	Successor						Predecessor
	December 31, 2021						December 31, 2020
	Gross				Net		Gross
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Net Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Intangible assets:
Customer-related and contract based intangibles	$	3,662	$	119	$	3,543	$	2,078	$	486	$	1,592
Technology related intangibles		254		20		234		316		180		136
Trade name (finite life)		407		14		393		8		6		2
Trade name (indefinite life)		—		—		—		3		—		3
Total	$	4,323	$	153	$	4,170	$	2,405	$	672	$	1,733

The net carrying amount of Intangible assets as of December 31, 2021 includes the preliminary fair values for customer-related and contract based identifiable intangible assets, technology related intangible assets and trade name assets based on management’s preliminary estimate of fair value (see Note 4 “Acquisitions” for further information).

As a result of the Business Combination, all accumulated amortization previously recorded by the Predecessor was reduced to zero as of July 1, 2021. Amortization expense from finite-lived intangible assets for the Successor six months ended December 31, 2021 and the Predecessor six months ended June 30, 2021 and years ended December 31, 2020 and 2019 was $153 million, $100 million, $200 million and $185 million, respectively, which was recorded in Depreciation and intangible amortization in the Consolidated Statements of Comprehensive Income (Loss).

The following table reflects intangible asset net carrying amount and weighted average remaining useful lives as of December 31, 2021 (in millions, except for years):


	Net		Weighted Average
	Carrying		Remaining
	Amount		Useful Lives
Intangible assets at December 31, 2021:
Customer-related and contract based intangibles	$	3,543		14.5
Technology related intangibles		234		5.5
Trade name (finite life)		393		14.3
Total	$	4,170

Subsequent to December 31, 2021, the annual amortization expense is expected to be as follows (in millions):


	Customer-Related		Technology		Trade
	and Contract Based		Related		Name
	Intangibles		Intangibles		Intangible
2022	$	245	$	43	$	28
2023		245		43		28
2024		245		43		28
2025		245		43		28
2026		245		42		27
Thereafter		2,318		20		254
Total amortization expense	$	3,543	$	234	$	393