Intangible Assets Including Goodwill

3 Months Ended

Mar. 31, 2022

Intangible Assets Including Goodwill

Intangible Assets Including Goodwill

11. Intangible Assets Including Goodwill: 

Intangible Assets

The following tables present the company's intangible asset balances by major asset class.

	At March 31, 2022
	Gross Carrying		Accumulated		Net Carrying
(Dollars in millions)	Amount		Amortization		Amount*
Intangible asset class:
Capitalized software	$	1,805	$	(729)	$	1,076
Client relationships		9,013		(3,017)		5,996
Completed technology		6,092		(2,427)		3,665
Patents/trademarks		2,192		(624)		1,567
Other**		38		(30)		8
Total	$	19,140	$	(6,828)	$	12,312

	At December 31, 2021
	Gross Carrying		Accumulated		Net Carrying
(Dollars in millions)	Amount		Amortization		Amount*
Intangible asset class:
Capitalized software	$	1,696	$	(751)	$	945
Client relationships		9,021		(2,889)		6,132
Completed technology		6,074		(2,259)		3,815
Patents/trademarks		2,196		(586)		1,610
Other**		44		(35)		9
Total	$	19,031	$	(6,520)	$	12,511

*  Amounts as of March 31, 2022 and December 31, 2021 include a decrease in net intangible asset balances of $60 million and $221 million, respectively, due to foreign currency translation.

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

The net carrying amount of intangible assets decreased $199 million during the first three months of 2022, primarily due to intangible asset amortization, partially offset by additions of acquired intangibles and capitalized software. The aggregate intangible amortization expense was $625 million and $614 million for the quarters ended March 31, 2022 and 2021, respectively. In the first three months of 2022, the company retired $297 million of fully amortized intangible assets, impacting both the gross carrying amount and accumulated amortization by this amount.

The future amortization expense relating to intangible assets currently recorded in the Consolidated Balance Sheet is estimated to be the following at March 31, 2022:

	Capitalized		Acquired
(Dollars in millions)	Software		Intangibles		Total
Remainder of 2022	$	459	$	1,377	$	1,836
2023		404		1,535		1,938
2024		203		1,487		1,690
2025		10		1,470		1,480
2026		0		1,453		1,453
Thereafter		0		3,915		3,915

Goodwill

The changes in the goodwill balances by segment for the three months ended March 31, 2022 and for the year ended December 31, 2021 are as follows:

									Foreign
									Currency
					Purchase				Translation
(Dollars in millions)	Balance		Goodwill		Price				and Other		Balance
Segment	1/1/2022		Additions		Adjustments		Divestitures		Adjustments*		3/31/2022
Software	$	43,966	$	188	$	(27)	$	—	$	(99)	$	44,027
Consulting		6,797		461		(3)		—		(49)		7,205
Infrastructure		4,396		—		—		(1)		(5)		4,390
Other		484		—		—		—		—		484
Total	$	55,643	$	649	$	(31)	$	(1)	$	(153)	$	56,106

									Foreign
									Currency
					Purchase				Translation
(Dollars in millions)	Balance		Goodwill		Price				and Other		Balance
Segment	1/1/2021		Additions		Adjustments		Divestitures		Adjustments*		12/31/2021
Software**	$	42,665	$	1,836	$	23	$	(13)	$	(545)	$	43,966
Consulting		6,145		713		(21)		—		(40)		6,797
Infrastructure		4,436		—		0		—		(39)		4,396
Other**		520		—		—		(37)		1		484
Total	$	53,765	$	2,549	$	2	$	(50)	$	(623)	$	55,643

* Primarily driven by foreign currency translation.

** Recast to conform to current year presentation due to segment change.

There were no goodwill impairment losses recorded during the first three months of 2022 or full-year 2021 and the company has no accumulated impairment losses. Purchase price adjustments recorded in the first three months of 2022 and full-year 2021 were related to acquisitions that were still subject to the measurement period that ends at the earlier of 12 months from the acquisition date or when information becomes available. Net purchase price adjustments recorded during the first three months of 2022 and 2021 were not material.