INTUIT INC | 2013 | FY | 3


Goodwill and Acquired Intangible Assets

We have reclassified our balance sheets to reflect the net assets of Intuit Financial Services as discontinued operations for all periods presented. Consequently, the goodwill and intangible assets of IFS are not included in the tables below. Because the net assets of our Intuit Websites and Intuit Health discontinued operations were not material for any period presented, we have not reclassified our balance sheets to reflect them as discontinued operations. Consequently, balances and activity relating to the goodwill and intangible assets of those businesses are included in the tables below. See Note 8, “Discontinued Operations,” for more information.

Goodwill

Changes in the carrying value of goodwill by reportable segment during the twelve months ended July 31, 2013 and July 31, 2012 were as shown in the following table. Our reportable segments are described in Note 15, “Segment Information.”

(In millions)
Balance
July 31,
2011
 
Goodwill
Acquired/
Adjusted
 
Balance
July 31,
2012
 
Goodwill
Acquired/
Adjusted
 
Goodwill Impairment Charges
 
Balance
July 31,
2013
Financial Management Solutions
$
151

 
$
316

 
$
467

 
$
(2
)
 

 
$
465

Employee Management Solutions
271

 

 
271

 

 

 
271

Payment Solutions
182

 
9

 
191

 

 

 
191

Consumer Tax
30

 

 
30

 

 

 
30

Accounting Professionals
90

 

 
90

 

 

 
90

Other Businesses
236

 
1

 
237

 

 
(38
)
 
199

Totals
$
960

 
$
326

 
$
1,286

 
$
(2
)
 
$
(38
)
 
$
1,246




We had no accumulated goodwill impairment losses for our continuing operations at July 31, 2011. 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 charges we recorded in fiscal 2013 and fiscal 2011 for our Intuit Health reporting unit, which was part of our Other Businesses segment before becoming discontinued operations in the fourth quarter of fiscal 2013. The increase in goodwill in our Financial Management Solutions segment during the twelve months ended July 31, 2012 was due to the acquisition of Demandforce, Inc. See Note 7, “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.
(Dollars in millions)
Customer
Lists
 
Purchased
Technology
 
Trade
Names
and Logos
 
Covenants
Not to
Compete
or Sue
 
Total
 
 
 
 
 
 
 
 
 
 
At July 31, 2013:
 
 
 
 
 
 
 
 
 
Cost
$
306

 
$
277

 
$
32

 
$
33

 
$
648

Accumulated amortization
(249
)
 
(207
)
 
(20
)
 
(23
)
 
(499
)
Acquired intangible assets, net
$
57

 
$
70

 
$
12

 
$
10

 
$
149

Weighted average life in years
7

 
6

 
6

 
9

 
7

 
 
 
 
 
 
 
 
 
 
At July 31, 2012:
 
 
 
 
 
 
 
 
 
Cost
$
345

 
$
304

 
$
33

 
$
33

 
$
715

Accumulated amortization
(255
)
 
(214
)
 
(18
)
 
(21
)
 
(508
)
Acquired intangible assets, net
$
90

 
$
90

 
$
15

 
$
12

 
$
207

Weighted average life in years
6

 
6

 
6

 
8

 
7


  

The following table shows the expected future amortization expense for our acquired intangible assets at July 31, 2013. 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,
 
2014
$
43

2015
39

2016
28

2017
19

2018
13

Thereafter
7

Total expected future amortization expense
$
149




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