Goodwill and Acquired Intangible Assets

12 Months Ended

Jul. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Changes in the carrying value of goodwill by reportable segment during the twelve months ended July 31, 2016 and July 31, 2015 were as shown in the following table. Our reportable segments are described in Note 14, “Segment Information.”



(In millions)	Balance July 31, 2014		Goodwill Acquired/ Adjusted			Goodwill Impairment Charges			Balance July 31, 2015		Goodwill Acquired/ Adjusted		Balance July 31, 2016
Small Business	$	1,213	$	58		$	(114	)	$	1,157	$	16	$	1,173
Consumer Tax	17		1			—			18		—		18
ProConnect	93		(2		)	—			91		—		91
Totals	$	1,323	$	57		$	(114	)	$	1,266	$	16	$	1,282

We had no accumulated goodwill impairment losses for our continuing operations at July 31, 2014. See Note 2, “Fair Value Measurements – Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis,” for a description of the goodwill impairment charge we recorded for our Consumer Ecosystem reporting unit in fiscal 2015. The increase in goodwill in our Small Business segment during the twelve months ended July 31, 2015 was due to a number of small acquisitions, none of which were individually significant.

Acquired Intangible Assets

The following table shows the cost, accumulated amortization and weighted average life in years for our acquired intangible assets at the dates indicated. The weighted average lives are calculated for assets that are not fully amortized.



(Dollars in millions)	Customer Lists			Purchased Technology			Trade Names and Logos			Covenants Not to Compete or Sue			Total

At July 31, 2016:
Cost	$	241		$	369		$	23		$	32		$	665
Accumulated amortization	(240		)	(329		)	(23		)	(29		)	(621		)
Acquired intangible assets, net	$	1		$	40		$	—		$	3		$	44
Weighted average life in years	5			6			NA			9			6

At July 31, 2015:
Cost	$	243		$	371		$	24		$	32		$	670
Accumulated amortization	(239		)	(294		)	(23		)	(27		)	(583		)
Acquired intangible assets, net	$	4		$	77		$	1		$	5		$	87
Weighted average life in years	5			5			4			9			5

The following table shows the expected future amortization expense for our acquired intangible assets at July 31, 2016. Amortization of purchased technology is charged to cost of service and other revenue and to amortization of acquired technology in our statements of operations. Amortization of other acquired intangible assets such as customer lists is charged to amortization of other acquired intangible assets in our statements of operations. If impairment events occur, they could accelerate the timing of acquired intangible asset charges.



(In millions)	Expected Future Amortization Expense

Twelve months ending July 31,
2017	$	21
2018	14
2019	6
2020	3
2021	—
Thereafter	—
Total expected future amortization expense	$	44

- 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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