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Goodwill and Intangible Assets, Net
 12 Months Ended
Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets, Net Goodwill and Intangible Assets, Net
Goodwill
Changes in the carrying amount of goodwill were as follows:
(In millions)
U.S. Pharmaceutical (1)
Prescription Technology SolutionsMedical-Surgical SolutionsInternationalTotal
Balance, March 31, 2022$3,923 $1,542 $2,453 $1,533 $9,451 
Goodwill acquired (2)
160 463 — 5 628 
Foreign currency translation adjustments, net(21)— — (99)(120)
Other adjustments(12)— — — (12)
Balance, March 31, 20234,050 2,005 2,453 1,439 9,947 
Goodwill acquired (2)
80 19 83 13 195 
Foreign currency translation adjustments, net— — — (3)(3)
Other adjustments(7)— — — (7)
Balance, March 31, 2024$4,123 $2,024 $2,536 $1,449 $10,132 
(1)Subsequent to the sale of the E.U. disposal group in October 2022, the goodwill balance allocated to the U.S. Pharmaceutical segment related to McKesson Europe’s Celesio AG acquisition no longer reflects foreign currency translation adjustments as its functional currency was changed from Euros to U.S. dollars with the completion of this divestiture.
(2)For fiscal 2023, primarily represents goodwill recognized from the acquisition of RxSS and formation of SCRI Oncology, as further discussed in Financial Note 2, “Business Acquisitions and Divestitures.” For fiscal 2024, represents goodwill recognized from business acquisitions completed primarily during the fourth quarter of fiscal 2024 that are immaterial to the Company’s financial statements, both individually and collectively.
Goodwill Impairment Charges
The Company evaluates goodwill for impairment on an annual basis in the first fiscal quarter, and more frequently if indicators for potential impairment exist. Goodwill impairment testing is conducted at the reporting unit level, which is generally defined as an operating segment or one level below an operating segment (also known as a component), for which discrete financial information is available and segment management regularly reviews the operating results of that reporting unit. During the first quarter of fiscal 2023, the Company voluntarily changed its annual goodwill impairment testing date from October 1st to April 1st to align with a change in the timing of the Company’s annual long-term planning process. Accordingly, management determined that the change in accounting principle is preferable under the circumstance. This change has been applied prospectively from April 1, 2022, as a retrospective application is deemed impracticable due to the inability to objectively determine the assumptions and significant estimates used in earlier periods without the benefit of hindsight. This change was not material to the Company’s consolidated financial statements as it did not delay, accelerate, or avoid any potential goodwill impairment charge.
The fair value of the reporting units is determined using a combination of an income approach based on a DCF model and a market approach based on appropriate valuation multiples observed for the reporting unit’s guideline public companies. Fair value estimates result from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions that have been deemed reasonable by management as of the measurement date. Any material changes in key assumptions, including failure to improve operations of certain retail pharmacy stores, additional government reimbursement reductions, deterioration in the financial markets, an increase in interest rates, or an increase in the cost of equity financing by market participants within the industry, or other unanticipated events and circumstances, may affect such estimates. The discount rates are the weighted-average cost of capital measuring the reporting unit’s cost of debt and equity financing weighted by the percentage of debt and percentage of equity in a company’s target capital. The unsystematic risk premium is an input factor used in calculating the discount rate that specifically addresses uncertainty related to the reporting unit’s future cash flow projections. Fair value assessments of the reporting unit are considered a Level 3 measurement due to the significance of unobservable inputs developed using company-specific information.
The annual impairment testing performed for fiscal 2024, fiscal 2023, and fiscal 2022 did not indicate any impairment of goodwill.
As of March 31, 2024 and 2023, accumulated goodwill impairment losses in the Company’s International segment were approximately $700 million. Most of the goodwill impairment for these reporting units was generally not deductible for income tax purposes.
Intangible Assets
Information regarding intangible assets were as follows:
March 31, 2024March 31, 2023
(Dollars in millions)Weighted-
Average
Remaining
Amortization
Period
(Years)		Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount		Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount
Customer relationships11$1,830 $(701)$1,129 $2,971 $(1,765)$1,206 
Service agreements101,126 (676)450 1,137 (623)514
Trademarks and trade names12759 (395)364 833(430)403
Technology10284 (125)159 264(129)135
Other634 (26)8 193(174)19
Total (1)
$4,033 $(1,923)$2,110 $5,398 $(3,121)$2,277 
(1)During the third quarter of fiscal 2024, the Company performed a review of its intangible assets and removed from the balance sheet $1.4 billion of fully amortized gross intangible assets and the corresponding accumulated amortization associated with the assets that no longer provide an economic benefit, are no longer in use, or for which the related contract has expired.
All intangible assets were subject to amortization as of March 31, 2024 and 2023. Amortization expense of intangible assets was $249 million, $236 million, and $332 million for fiscal 2024, fiscal 2023, and fiscal 2022, respectively. Estimated amortization expense of the assets listed in the table above is as follows: $246 million, $214 million, $207 million, $203 million, and $200 million for fiscal 2025 through fiscal 2029, respectively, and $1.0 billion thereafter.
Refer to Financial Note 2, “Business Acquisitions and Divestitures,” for a description of the goodwill and intangible assets recognized as part of the RxSS acquisition and formation of SCRI Oncology.
Refer to Financial Note 3, “Restructuring, Impairment, and Related Charges, Net,” for more information on long-lived asset impairment charges recorded in fiscal 2022.