Goodwill and Acquired Intangible Assets

12 Months Ended

Jul. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

5. Goodwill and Acquired Intangible Assets

Goodwill

Changes in the carrying value of goodwill by reportable segment during the twelve months ended July 31, 2018 and July 31, 2017 were as shown in the following table. Our reportable segments are described in Note 14, “Segment Information.”



(In millions)	Balance July 31, 2016		Goodwill Acquired/ Adjusted		Balance July 31, 2017		Goodwill Acquired/ Adjusted		Balance July 31, 2018
Small Business & Self-Employed	$	1,168	$	12	$	1,180	$	316	$	1,496
Consumer	23		—		23		—		23
Strategic Partner	91		1		92		—		92
Totals	$	1,282	$	13	$	1,295	$	316	$	1,611

Goodwill is net of accumulated impairment losses of $114 million, which were recorded prior to July 31, 2016 and are included in our Consumer segment. The increase in goodwill in our Small Business & Self-Employed segment during the twelve months ended July 31, 2018 was primarily due to the acquisitions of TSheets.com LLC, Exactor, Inc., and Applatix. See Note 6, “Business Combinations,” for more information.

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, 2018:
Cost	$	257		$	403		$	25		$	39		$	724
Accumulated amortization	(242		)	(364		)	(24		)	(33		)	(663		)
Acquired intangible assets, net	$	15		$	39		$	1		$	6		$	61
Weighted average life in years	5			4			3			3			4

At July 31, 2017:
Cost	$	240		$	367		$	23		$	32		$	662
Accumulated amortization	(240		)	(346		)	(23		)	(31		)	(640		)
Acquired intangible assets, net	$	—		$	21		$	—		$	1		$	22
Weighted average life in years	NA			6			NA			9			6

The following table shows the expected future amortization expense for our acquired intangible assets at July 31, 2018. 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,
2019	$	25
2020	22
2021	10
2022	3
2023	1
Thereafter	—
Total expected future amortization expense	$	61