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GOODWILL AND OTHER INTANGIBLE ASSETS
 3 Months Ended
Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Disclosure [Text Block] Goodwill and Other Intangible Assets
Goodwill is allocated by reportable segment as follows:
BeautyGroomingHealth CareFabric & Home CareBaby, Feminine & Family CareTotal Company
Goodwill at June 30, 2022$13,296 $12,571 $7,589 $1,808 $4,436 $39,700 
Acquisitions and divestitures— — — — — — 
Translation and other(344)(254)(217)(29)(95)(939)
Goodwill at September 30, 2022$12,952 $12,317 $7,372 $1,779 $4,341 $38,761 
Goodwill decreased from June 30, 2022 primarily due to currency translation.
Identifiable intangible assets at September 30, 2022 were comprised of:
Gross Carrying AmountAccumulated Amortization
Intangible assets with determinable lives$8,890 $(6,284)
Intangible assets with indefinite lives20,859 — 
Total identifiable intangible assets$29,749 $(6,284)
Intangible assets with determinable lives consist of brands, patents, technology and customer relationships. The intangible assets with indefinite lives primarily consist of brands. The amortization expense of determinable-lived intangible assets for the three months ended September 30, 2022 and 2021 was $80 and $77, respectively.
Goodwill and indefinite-lived intangible assets are not amortized but are tested at least annually for impairment. We use the income method to estimate the fair value of these assets, which is based on forecasts of the expected future cash flows attributable to the respective assets. If the resulting fair value is less than the asset's carrying value, that difference represents an impairment.
Most of our goodwill reporting units have fair value cushions that significantly exceed their underlying carrying values. In connection with the Grooming operating segment integration as described further in Note 3, we concluded that the Shave Care and Appliances categories are one reporting unit (Grooming) for goodwill impairment testing. Based on our impairment testing performed in the prior fiscal year, goodwill for the Grooming reporting unit has a fair value cushion of over 40%.
Based on our impairment testing performed in the prior fiscal year, the Gillette indefinite-lived intangible asset's fair value exceeded its carrying value by approximately 5% and is most susceptible to future impairment risk. Adverse changes in the business or in the macroeconomic environment, including foreign currency devaluation, increasing global inflation, market contraction from an economic recession and the Russia-Ukraine War, could reduce the underlying cash flows used to estimate the fair value of the Gillette indefinite-lived intangible asset and trigger a future impairment charge. The most significant assumptions utilized in the determination of the estimated fair value of the Gillette indefinite-lived intangible asset are the net sales growth rates (including residual growth rates), discount rate and royalty rates.
Net sales growth rates could be negatively impacted by reductions or changes in demand for our Grooming products, which may be caused by, among other things: changes in the use and frequency of grooming products, by shifts in demand away from one or more of our higher priced products to lower priced products or potential supply chain constraints. In addition, relative global and country/regional macroeconomic factors, including the Russia-Ukraine War, could result in additional and prolonged devaluation of other countries' currencies relative to the U.S. dollar. The residual growth rates represent the expected rate at which the Gillette brand is expected to grow beyond the shorter-term business planning period. The residual growth rates utilized in our fair value estimates are consistent with the brand operating plans and approximate expected long-term category market growth rates. The residual growth rate depends on overall market growth rates, the competitive environment, inflation, relative currency exchange rates and business activities that impact market share. As a result, the residual growth rate could be adversely impacted by a sustained deceleration in category growth, grooming habit changes, devaluation of currencies against the U.S. dollar or an increased competitive environment.
The discount rate, which is consistent with a weighted average cost of capital that is likely to be expected by a market participant, is based upon industry required rates of return, including consideration of both debt and equity components of the capital structure. Our discount rate may be impacted by adverse changes in the macroeconomic environment, volatility in the equity and debt markets or other country specific factors, such as further devaluation of currencies against the U.S. dollar. Spot rates as of the fair value measurement date are utilized in our fair value estimates for cash flows outside the U.S.
The royalty rate used to determine the estimated fair value for the Gillette indefinite-lived intangible asset is driven by historical and estimated future profitability of the underlying Gillette business. The royalty rate may be impacted by significant adverse changes in long-term operating margins.
We performed a sensitivity analysis for the Gillette indefinite-lived intangible asset during our annual impairment testing from the prior year, utilizing reasonably possible changes in the assumptions for the discount rate, the short-term and residual growth rates and the royalty rates to demonstrate the potential impacts to estimated fair values. The table below provides, in isolation, the estimated fair value impacts related to a 25 basis-point increase in the discount rate, a 25 basis-point decrease in our short-term and residual growth rates or a 50 basis-point decrease in our royalty rates, some of which would result in an impairment of the Gillette indefinite-lived intangible asset.
Approximate Percent Change in Estimated Fair Value
+25 bps Discount Rate-25 bps Growth Rates-50 bps Royalty Rate
Gillette indefinite-lived intangible asset(6)%(6)%(3)%
Gillette's business results in the fiscal year ended June 30, 2022 exceeded the assumptions in our impairment testing from the prior year. However, during the three months ended September 30, 2022, the relative currency exchange rates devalued against the U.S. dollar and the inputs to the cost of capital determination increased. These macroeconomic changes place increased pressure on the fair value of the Gillette indefinite-lived intangible asset. Based on our assessment, we determined it is more likely than not that the fair value of the Gillette indefinite-lived intangible asset continues to exceed its carrying value of $14.1 billion as of September 30, 2022. Therefore, we have concluded that no triggering event has occurred in the current quarter. We will perform our annual impairment testing for goodwill and indefinite-lived intangible assets during the three months ended December 31, 2022.