Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

The changes in the net carrying amount of goodwill for the nine months ended September 30, 2017 are as follows (in millions):



Balance as of December 31, 2016	$	7,410
Goodwill related to current year acquisitions	121
Goodwill related to disposals	(1		)
Goodwill related to prior year acquisitions	(6		)
Foreign currency translation	364
Balance as of September 30, 2017	$	7,888

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



	September 30, 2017						December 31, 2016
	Gross Carrying Amount		Accumulated Amortization and Impairment		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization and Impairment		Net Carrying Amount
Customer related and contract based	$	2,104	$	1,380	$	724	$	2,023	$	1,198	$	825
Tradenames⁽¹⁾	1,041		478		563		1,027		7		1,020
Technology and other⁽¹⁾	384		330		54		347		302		45
Total	$	3,529	$	2,188	$	1,341	$	3,397	$	1,507	$	1,890


(1)	Prior to May 1, 2017, finite lived tradenames were classified within Technology and other. As of December 31, 2016, $29 million of gross carrying amount and $7 million of accumulated amortization related to finite-lived tradenames was reclassified from Technology and other to Tradenames.

In the second quarter of 2017 and in connection with the completion of the sale of the Divested Business, the Company recognized a non-cash impairment charge to the associated tradenames of $380 million. The fair value of the tradenames was determined using the Relief from Royalty Method. This impairment was included in Amortization and impairment of intangible assets on the Condensed Consolidated Statement of Income. Refer to Note 3 “Discontinued Operations” for further information.

Additionally, effective May 1, 2017 and consistent with operating as one segment, the Company implemented a three-year strategy to transition to a unified Aon brand. As a result, Aon commenced amortization of all indefinite lived tradenames and prospectively accelerated amortization of its finite-lived tradenames over the three-year period. The change in estimated useful life resulted in additional amortization expense, net of tax, to continuing operations of $34 million, or $0.13 per share, and $56 million, or $0.21 per share, in the three and nine months ended September 30, 2017, respectively.

Amortization expense and impairment charges from finite lived intangible assets was $101 million and $604 million for the three and nine months ended September 30, 2017, respectively. Amortization expense from finite lived intangible assets was $42 million and $117 million for the three and nine months ended September 30, 2016, respectively.

The estimated future amortization for finite lived intangible assets as of September 30, 2017 is as follows (in millions):



Remainder of 2017	$	117
2018	376
2019	357
2020	196
2021	89
Thereafter	206
Total	$	1,341

- 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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