As discussed in Note 3, effective January 1, 2022, as part of its strategic refresh, Citi made changes to its management structure, which resulted in changes in its operating segments and reporting units to reflect how the CEO, who is the chief operating decision maker, manages the Company, including allocating resources and measuring performance. Goodwill balances were reallocated across the new reporting units based on their relative fair values using the valuation performed as of the effective date of the reorganization. Further, the goodwill balances associated with certain Asia Consumer businesses within the Legacy Franchises operating segment were reclassified to HFS as of March 31, 2022 upon the signing of the respective sale agreements. See Note 2 for a discussion of Citi’s divestiture activities.

The reorganization of Citi’s reporting structure and the announced sales of businesses within a reporting unit were identified as triggering events for purposes of goodwill impairment testing. Consistent with the requirements of ASC 350, interim goodwill impairment tests were performed that resulted in an impairment of $535 million to the Asia Consumer reporting unit within the Legacy Franchises operating segment, due to the implementation of Citi’s revised operating segments and reporting units, as well as the timing of mutual execution of sale agreements for Asia consumer banking businesses. This impairment was recorded in the first quarter of 2022 as an operating expense. There were no additional impairment charges incurred as a result of any of the other interim goodwill impairment tests performed during 2022.

For the interim impairment tests performed in the first quarter of 2022, the valuation of reporting units used either the market approach, income approach, or a combination of both. Under the market approach, Citi estimated fair value by comparing the business to similar businesses or guideline

companies whose securities are actively traded in public markets. Under the income approach, Citi used a discounted cash flow (DCF) model in which cash flows anticipated over several periods, plus a terminal value at the end of that time horizon, are discounted to their present value using an appropriate rate that is commensurate with the risk inherent within the reporting unit.

The key assumptions used to determine the fair value of Citi’s reporting units consisted primarily of significant unobservable inputs (Level 3 fair value inputs), including discount rates, estimated cash flows, growth rates, earnings multiples and/or transaction multiples of similar businesses or guideline public companies, and bids from buyers. The DCF method employs a capital asset pricing model in estimating the discount rate based on several factors, including market interest rates, and includes adjustments for market risk and company-specific risk. Estimated cash flows are based on internally developed estimates and the growth rates are based on industry knowledge and historical performance.

Citi had historically performed its annual goodwill impairment test as of July 1 each year. During the quarter ended September 30, 2022, the Company voluntarily changed its annual impairment assessment date from July 1 to October 1. Based on interim impairment tests performed within the period between the previous annual test on July 1, 2021 and the annual test to be performed on October 1, 2022, no more than 12 months have elapsed between goodwill impairment tests of any of Citi’s reporting units. The change in measurement date represents a change in method of applying an accounting principle. This change is preferable because it better aligns the Company’s goodwill impairment testing procedures with its annual planning process and with its fiscal year-end. Citi continues to monitor each reporting unit for triggering events for purposes of goodwill impairment testing.

The change in accounting principle did not result in any delay, acceleration or avoidance of an impairment charge.

Citi performed its annual goodwill impairment test as of October 1, 2022, which resulted in no impairment of any of Citi’s reporting units. While the inherent risk of uncertainty is embedded in the key assumptions used in the valuations, the economic and business environments continue to evolve as management implements its strategic refresh. If management’s future estimate of key economic and market assumptions were to differ from its current assumptions, Citi could potentially experience material goodwill impairment charges in the future.

For additional information regarding Citi’s goodwill impairment testing process, see the following Notes to the Consolidated Financial Statements: Note 1 for Citi’s accounting policy for goodwill and Note 3 for a description of Citi’s operating segments.

Intangible Assets

The components of intangible assets were as follows:


	December 31, 2022						December 31, 2021
In millions of dollars	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Purchased credit card relationships	$	5,513	$	4,426	$	1,087	$	5,579	$	4,348	$	1,231
Credit card contract-related intangibles(1)	3,903		1,518		2,385		3,912		1,372		2,540
Core deposit intangibles	37		37		—		39		39		—
Other customer relationships	373		283		90		429		305		124
Present value of future profits	32		31		1		31		29		2
Indefinite-lived intangible assets	192		—		192		183		—		183
Other	28		20		8		37		26		11
Intangible assets (excluding MSRs)	$	10,078	$	6,315	$	3,763	$	10,210	$	6,119	$	4,091
Mortgage servicing rights (MSRs)(2)	665		—		665		404		—		404
Total intangible assets	$	10,743	$	6,315	$	4,428	$	10,614	$	6,119	$	4,495

(1) Primarily reflects contract-related intangibles associated with the American Airlines, The Home Depot, Costco and AT&T credit card program agreements, which represented 97% of the aggregate net carrying amount as of December 31, 2022.

(2) See Note 22 for additional information on Citi’s MSRs.

Intangible assets amortization expense was $352 million, $360 million and $419 million for 2022, 2021 and 2020, respectively. Intangible assets amortization expense is estimated to be $373 million in 2023, $381 million in 2024, $388 million in 2025, $348 million in 2026 and $341 million in 2027.

The changes in intangible assets were as follows:


	Net carrying amount at		Acquisitions/renewals/divestitures								Net carrying amount at
In millions of dollars	December 31, 2021				Amortization		Impairments		FX translation and other		December 31, 2022
Purchased credit card relationships(1)	$	1,231	$	3	$	(140)	$	—	$	(7)	$	1,087
Credit card contract-related intangibles(2)	2,540		—		(154)		—		(1)		2,385
Core deposit intangibles	—		—		—		—		—		—
Other customer relationships	124		10		(24)		—		(20)		90
Present value of future profits	2		—		(1)		—		—		1
Indefinite-lived intangible assets	183		—		—		—		9		192
Other	11		33		(33)		—		(3)		8
Intangible assets (excluding MSRs)	$	4,091	$	46	$	(352)	$	—	$	(22)	$	3,763
Mortgage servicing rights (MSRs)(3)	404										665
Total intangible assets	$	4,495									$	4,428

(1)Reflects intangibles for the value of purchased cardholder relationships, which are discrete from partner contract-related intangibles, and includes credit card accounts primarily in the Costco, Macy’s and Sears portfolios.

(2)Primarily reflects contract-related intangibles associated with the extension or renewal of existing credit card program agreements with American Airlines, The Home Depot, Costco and AT&T, which represent 97% and 97% of the aggregate net carrying amount at December 31, 2022 and 2021, respectively.

(3)See Note 22 for additional information on Citi’s MSRs, including the rollforward from 2021 to 2022.