Intangible Assets Including Goodwill

12 Months Ended

Dec. 31, 2014

Intangible Assets Including Goodwill

Note I.

Intangible Assets Including Goodwill

Intangible Assets

The following table details the company’s intangible asset balances by major asset class.


($ in millions)

		Gross Carrying		Accumulated		Net Carrying
At December 31, 2014:		Amount		Amortization		Amount
Intangible asset class
	Capitalized software	$	1,375	$	(679)	$	696
	Client relationships		2,208		(1,271)		937
	Completed technology		2,831		(1,533)		1,298
	In-process R&D		—		—		—
	Patents/trademarks		374		(214)		161
	Other*		18		(6)		12
Total		$	6,806	$	(3,702)	$	3,104


($ in millions)

		Gross Carrying		Accumulated		Net Carrying
At December 31, 2013:		Amount		Amortization		Amount
Intangible asset class
	Capitalized software	$	1,494	$	(699)	$	794
	Client relationships		2,148		(977)		1,171
	Completed technology		2,910		(1,224)		1,687
	In-process R&D		13		—		13
	Patents/trademarks		358		(154)		204
	Other*		7		(5)		2
Total		$	6,930	$	(3,059)	$	3,871

* Other intangibles are primarily acquired proprietary and nonproprietary business processes, methodologies and systems.

The net carrying amount of intangible assets decreased $768 million during the year ended December 31, 2014, primarily due to amortization, partially offset by intangible asset additions resulting from acquisitions. There was no impairment of intangible assets recorded in 2014 and 2013. The aggregate intangible amortization expense was $1,347 million and $1,351 million for the years ended December 31, 2014 and 2013, respectively. In addition, in 2014 and 2013, respectively, the company retired $724 million and $1,177 million of fully amortized intangible assets, impacting both the gross carrying amount and accumulated amortization by this amount.

The amortization expense for each of the five succeeding years relating to intangible assets currently recorded in the Consolidated Statement of Financial Position is estimated to be the following at December 31, 2014:


($ in millions)

	Capitalized		Acquired
	Software		Intangibles		Total
2015	$	420	$	648	$	1,068
2016		211		605		816
2017		65		494		559
2018		—		349		349
2019		—		210		210

Goodwill

The changes in the goodwill balances by reportable segment, for the years ended December 31, 2014 and 2013, are as follows:


($ in millions)

									Foreign
									Currency
	Balance				Purchase				Translation			Balance
	January 1,		Goodwill		Price				And Other			December 31,
Segment	2014		Additions		Adjustments		Divestitures		Adjustments			2014
Global Business Services	$	4,334	$	—	$	0	$	0		$	(248)	$	4,086
Global Technology Services		4,129		11		20		(54)			(109)		3,998
Software		21,121		430		(17)		(19)			(516)		21,000
Systems and Technology		1,601		—		—		(110)			(19)		1,472
Total	$	31,184	$	442	$	4	$	(183)		$	(891)	$	30,556


($ in millions)

									Foreign
									Currency
	Balance				Purchase				Translation		Balance
	January 1,		Goodwill		Price				And Other		December 31,
Segment	2013		Additions		Adjustments		Divestitures		Adjustments		2013
Global Business Services	$	4,357	$	—	$	0	$	(3)	$	(21)	$	4,334
Global Technology Services		2,916		1,246		17		—		(50)		4,129
Software		20,405		987		11		(4)		(279)		21,121
Systems and Technology		1,568		13		33		—		(14)		1,601
Total	$	29,247	$	2,246	$	61	$	(7)	$	(363)	$	31,184

Purchase price adjustments recorded in 2014 and 2013 were related to acquisitions that were completed on or prior to December 31, 2013 or December 31, 2012, respectively, and were still subject to the measurement period that ends at the earlier of 12 months from the acquisition date or when information becomes available. There were no goodwill impairment losses recorded in 2014 or 2013 and the company has no accumulated goodwill impairment losses.

- 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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