Goodwill and Other Intangible Assets

9 Months Ended

Dec. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The following table summarizes the changes in the carrying amount of goodwill by segment for the nine months ended December 30, 2016:



(in millions)	GBS			GIS			Total
Balance as of April 1, 2016, net	$	914		$	363		$	1,277
Additions	613			32			645
Foreign currency translation	(134		)	(8		)	(142		)
Balance as of December 30, 2016, net	$	1,393		$	387		$	1,780

The fiscal 2017 additions to goodwill are due to the acquisitions of Xchanging and Aspediens. The foreign currency translation amount reflects the impact of currency movements on non-U.S. dollar-denominated goodwill balances.

The Company tests goodwill for impairment on an annual basis, as of the first day of the second fiscal quarter, and between annual tests if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying amount. For the Company’s annual goodwill impairment assessment as of July 2, 2016, the Company first assesses qualitative factors to determine whether events or circumstances existed that would lead the Company to conclude that it is more likely than not that the fair value of any of its reporting units was below their carrying amounts. If the Company determines that it is not more likely than not, then proceeding to step one of the two-step goodwill impairment test is not necessary. The Company chose to bypass the initial qualitative assessment and proceeded directly to the first step of the impairment test for all reporting units. Based on the results of the first step of the impairment test, the Company concluded that the fair value of each reporting unit exceeded its carrying value and therefore the second step of the goodwill impairment test was not required.

At the end of the third quarter of fiscal 2017, the Company assessed whether there were events or changes in circumstances that would more likely than not reduce the fair value of any of its reporting units below its carrying amount and require goodwill to be tested for impairment. The Company determined that there have been no such indicators, and, therefore, it was unnecessary to perform an interim goodwill impairment test as of December 30, 2016.

Other Intangible Assets

A summary of amortizable intangible assets is as follows:



	As of December 30, 2016
(in millions)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Software	$	2,361	$	1,563	$	798
Outsourcing contract costs	768		457		311
Customer and other intangible assets	926		251		675
Total intangible assets	$	4,055	$	2,271	$	1,784



	As of April 1, 2016
(in millions)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Software	$	2,243	$	1,531	$	712
Outsourcing contract costs	828		494		334
Customer and other intangible assets	485		203		282
Total intangible assets	$	3,556	$	2,228	$	1,328

Total intangible assets amortization was $81 million and $75 million for the three months ended December 30, 2016 and January 1, 2016, respectively. Total intangible assets amortization included reductions of revenue for amortization of outsourcing contract cost premiums of $2 million and $3 million, respectively. Amortization expense related to capitalized software, included within total intangible assets amortization, was $41 million and $43 million for the three months ended December 30, 2016 and January 1, 2016, respectively.

Total intangible assets amortization was $243 million and $214 million for the nine months ended December 30, 2016 and January 1, 2016, respectively. Total intangible assets amortization included reductions of revenue for amortization of outsourcing contract cost premiums of $8 million and $8 million, respectively. Amortization expense related to capitalized software, included within total intangible assets amortization, was $122 million and $125 million for the nine months ended December 30, 2016 and January 1, 2016, respectively.

The change in accumulated amortization for the three months and nine months ended December 30, 2016 also included foreign currency translation of $42 million and $68 million, respectively.

Estimated future amortization related to intangible assets as of December 30, 2016 is as follows:



Fiscal year	(in millions)
Remainder of 2017	$	86
2018	$	307
2019	$	282
2020	$	257
2021	$	214

During the nine months ended January 1, 2016, CSC sold certain fully amortized intangible assets to a third party and recorded a $31 million gain on sale as a reduction of cost of sales in its GIS segment. There were no sales of intangible assets to a third party during the first nine months of fiscal 2017.

- 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.

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