Other Assets

9 Months Ended

Sep. 30, 2023

The table below presents other assets by type.


	As of
	September		December
$ in millions	2023		2022
Property, leasehold improvements and equipment	$	13,138	$	17,074
Goodwill	5,913		6,374
Identifiable intangible assets	1,341		2,009
Operating lease right-of-use assets	2,165		2,172
Income tax-related assets	7,360		7,012
Miscellaneous receivables and other	7,024		4,567
Total	$	36,941	$	39,208

Property, Leasehold Improvements and Equipment

Property, leasehold improvements and equipment is net of accumulated depreciation and amortization of $13.82 billion as of September 2023 and $12.19 billion as of December 2022. Property, leasehold improvements and equipment included $6.62 billion as of September 2023 and $7.17 billion as of December 2022 that the firm uses in connection with its operations, and $52 million as of September 2023 and $89 million as of December 2022 of foreclosed real estate primarily related to distressed loans that were purchased by the firm. The remainder is held by investment entities, including VIEs, consolidated by the firm. Substantially all property and equipment is depreciated on a straight-line basis over the useful life of the asset. Leasehold improvements are amortized on a straight-line basis over the shorter of the useful life of the improvement or the term of the lease. Capitalized costs of software developed or obtained for internal use are amortized on a straight-line basis over three years.

The firm tests property, leasehold improvements and equipment for impairment when events or changes in circumstances suggest that an asset’s or asset group’s carrying value may not be fully recoverable. To the extent the carrying value of an asset or asset group exceeds the projected undiscounted cash flows expected to result from the use and eventual disposal of the asset or asset group, the firm determines the asset or asset group is impaired and records an impairment equal to the difference between the estimated fair value and the carrying value of the asset or asset group. In addition, the firm will recognize an impairment prior to the sale of an asset or asset group if the carrying value of the asset or asset group exceeds its estimated fair value. Any impairments recognized are included in depreciation and amortization.

The firm had impairments of $358 million during the three months ended September 2023, and $1.20 billion during the nine months ended September 2023, related to commercial real estate included in consolidated investment entities within Asset & Wealth Management. In addition, the firm had impairments of $80 million during the three months ended September 2023, and $113 million during the nine months ended September 2023, related to capitalized software substantially all within Platform Solutions and Asset & Wealth Management. The firm had impairments of $106 million during the three months ended September 2022 and $130 million during the nine months ended September 2022, related to consolidated investment entities within Asset & Wealth Management.

Goodwill

Goodwill is the cost of acquired companies in excess of the fair value of net assets, including identifiable intangible assets, at the acquisition date.

The table below presents the carrying value of goodwill by reporting unit.


	As of
	September		December
$ in millions	2023		2022
Global Banking & Markets:
Investment banking	$	267	$	267
FICC	269		269
Equities	2,647		2,647
Asset & Wealth Management:
Asset management	1,376		1,385
Wealth management	1,340		1,310
Platform Solutions:
Consumer platforms	–		482
Transaction banking and other	14		14
Total	$	5,913	$	6,374

In the table above:

•The decrease in goodwill from December 2022 to September 2023 was attributable to the impairment of goodwill associated with Consumer platforms. During the first quarter of 2023, goodwill for Consumer platforms increased by $22 million as a result of an updated purchase price allocation related to the GreenSky acquisition. During the second quarter of 2023, in connection with the exploration of a potential sale of GreenSky, the firm performed a quantitative goodwill test and determined that the goodwill associated with Consumer platforms was impaired, and accordingly, recorded a $504 million impairment.

•During 2022, goodwill increased by $2.09 billion, substantially all in connection with the acquisitions of GreenSky and NN Investment Partners (NNIP).

•Wealth management included $35 million of goodwill as of September 2023 that was classified as held for sale in connection with the planned sale of PFM.

Goodwill is assessed for impairment annually in the fourth quarter or more frequently if events occur or circumstances change that indicate an impairment may exist. When assessing goodwill for impairment, first, a qualitative assessment can be made to determine whether it is more likely than not that the estimated fair value of a reporting unit is less than its carrying value. If the results of the qualitative assessment are not conclusive, a quantitative goodwill test is performed. Alternatively, a quantitative goodwill test can be performed without performing a qualitative assessment.

The quantitative goodwill test compares the estimated fair value of each reporting unit with its carrying value (including goodwill and identifiable intangible assets). If the reporting unit’s estimated fair value exceeds its carrying value, goodwill is not impaired. An impairment is recognized if the estimated fair value of a reporting unit is less than its carrying value and any such impairment is included in depreciation and amortization.

In the fourth quarter of 2022, goodwill was tested for impairment using a quantitative test. The estimated fair value of each of the reporting units exceeded its respective carrying value, and therefore, goodwill was not impaired.

The estimated fair value of each reporting unit was based on valuation techniques the firm believes market participants would use to value these reporting units. Estimated fair values are generally derived from utilizing a relative value technique, which applies observable price-to-earnings multiples or price-to-book multiples of comparable competitors to the reporting units’ net earnings or net book value, or a discounted cash flow valuation approach, for reporting units with businesses in early stages of development. The carrying value of each reporting unit reflects an allocation of total shareholders’ equity and represents the estimated amount of total shareholders’ equity required to support the activities of the reporting unit under currently applicable regulatory capital requirements.

Based on the evaluation of relevant factors during the first nine months of 2023, other than the impairment noted above, the firm determined that it was more likely than not that the estimated fair value of each of the reporting units exceeded its respective carrying value as of September 2023.

Identifiable Intangible Assets

The table below presents identifiable intangible assets by type.


	As of
	September		December
$ in millions	2023		2022
Customer lists and merchant relationships
Gross carrying value	$	3,208	$	3,225
Accumulated amortization	(1,904)		(1,275)
Net carrying value	1,304		1,950

Acquired leases and other
Gross carrying value	480		486
Accumulated amortization	(443)		(427)
Net carrying value	37		59

Total gross carrying value	3,688		3,711
Total accumulated amortization	(2,347)		(1,702)
Total net carrying value	$	1,341	$	2,009

In the table above:

•The decrease in identifiable intangible assets from December 2022 to September 2023 was primarily attributable to the $506 million write-down related to GreenSky. These identifiable intangible assets, which are included within Platform Solutions, were classified as held for sale in connection with the planned sale of GreenSky and had a net carrying value of $110 million as of September 2023.

•As of September 2023, identifiable intangible assets of approximately $165 million (substantially all customer lists) were classified as held for sale in connection with the planned sale of PFM. These identifiable intangible assets are included within Asset & Wealth Management.

•During the nine months ended September 2023, the amount of identifiable intangible assets acquired by the firm was not material. The firm acquired approximately $1.79 billion of identifiable intangible assets (with a weighted average amortization period of 13 years) during 2022, substantially all in connection with the acquisitions of GreenSky and NNIP. Substantially all of these identifiable intangible assets consisted of customer lists and merchant relationships.

•Substantially all of the firm’s identifiable intangible assets have finite useful lives and are amortized over their estimated useful lives generally using the straight-line method.

The tables below present information about the amortization of identifiable intangible assets.



	Three Months Ended September				Nine Months Ended September
$ in millions	2023		2022		2023		2022
Amortization	$	554	$	54	$	654	$	124

In the table above, amortization for both the three and nine months ended September 2023 included the $506 million write-down related to GreenSky, which is included in depreciation and amortization.


	As of
$ in millions	September 2023
Estimated future amortization
Remainder of 2023	$	26
2024	$	99
2025	$	91
2026	$	84
2027	$	84
2028	$	83

The firm tests identifiable intangible assets for impairment when events or changes in circumstances suggest that an asset’s or asset group’s carrying value may not be fully recoverable. To the extent the carrying value of an asset or asset group exceeds the projected undiscounted cash flows expected to result from the use and eventual disposal of the asset or asset group, the firm determines the asset or asset group is impaired and records an impairment equal to the difference between the estimated fair value and the carrying value of the asset or asset group. In addition, the firm will recognize an impairment prior to the sale of an asset or asset group if the carrying value of the asset or asset group exceeds its estimated fair value. There were no material impairments during each of the three and nine months ended September 2023 or September 2022.

Operating Lease Right-of-Use Assets

The firm enters into operating leases for real estate, office equipment and other assets, substantially all of which are used in connection with its operations. For leases longer than one year, the firm recognizes a right-of-use asset representing the right to use the underlying asset for the lease term, and a lease liability representing the liability to make payments. The lease term is generally determined based on the contractual maturity of the lease. For leases where the firm has the option to terminate or extend the lease, an assessment of the likelihood of exercising the option is incorporated into the determination of the lease term. Such assessment is initially performed at the inception of the lease and is updated if events occur that impact the original assessment.

An operating lease right-of-use asset is initially determined based on the operating lease liability, adjusted for initial direct costs, lease incentives and amounts paid at or prior to lease commencement. This amount is then amortized over the lease term. Right-of-use assets and operating lease liabilities recognized (in non-cash transactions for leases entered into or assumed) by the firm were $225 million for the three months ended September 2023, $52 million for the three months ended September 2022, $306 million for the nine months ended September 2023 and $168 million for the nine months ended September 2022. See Note 15 for information about operating lease liabilities.

For leases where the firm will derive no economic benefit from leased space that it has vacated or where the firm has shortened the term of a lease when space is no longer needed, the firm will record an impairment or accelerated amortization of right-of-use assets. There were no material impairments or accelerated amortizations during each of the three and nine months ended September 2023 or September 2022.

Miscellaneous Receivables and Other

Miscellaneous receivables and other included:

•Investments in qualified affordable housing projects of $1.42 billion as of September 2023 and $793 million as of December 2022. The firm accounts for these investments using the proportional amortization method such that the investment is amortized in proportion to the income tax credits received on such investments. The amortization of investments and the related income tax credit are recorded as a component of the provision for taxes. During the nine months ended September 2023, the firm recognized amortization of $210 million and related income tax credits of $257 million, and during the nine months ended September 2022, the firm recognized amortization of $88 million and related income tax credits of $117 million. The amortization and the related tax credits were not material for either the three months ended September 2023 or September 2022.

•Assets classified as held for sale were $1.68 billion as of September 2023 and $285 million as of December 2022. See below for further information.

Assets Held for Sale. During the third quarter of 2023, in connection with the planned sale of GreenSky, the firm classified GreenSky (within Platform Solutions) as held for sale. After a reserve release of $637 million in provision for credit losses and a markdown of $123 million to reflect the loan portfolio at the lower of its carrying value or fair value less cost to sell, the firm wrote down $506 million of net assets of GreenSky (included in depreciation and amortization). As of September 2023, the assets of GreenSky were approximately $6.3 billion and consisted of loans of approximately $6.0 billion (included in loans), segregated cash of approximately $130 million (included in cash and cash equivalents), identifiable intangible assets of approximately $110 million (included in identifiable intangible assets within other assets) and other assets of approximately $190 million (included in miscellaneous receivables and other within other assets). See Note 9 for further information about loans classified as held for sale, above for further information about identifiable intangible assets, and Note 15 for information about liabilities classified as held for sale.

In addition, during the third quarter of 2023, in connection with the planned sale of PFM, the firm classified PFM (within Asset & Wealth Management) as held for sale. As of September 2023, assets related to this business were approximately $200 million. These assets included identifiable intangible assets of $165 million (included in identifiable intangible assets within other assets) and goodwill of $35 million (included in goodwill within other assets). See above for further information about goodwill and identifiable intangible assets.

Assets held for sale also included $1.49 billion as of September 2023 and $285 million as of December 2022 of assets related to certain of the firm’s consolidated investments within Asset & Wealth Management. Substantially all of these assets consisted of property and equipment and were included in miscellaneous receivables and other within other assets.