Note I.
Intangible Assets Including Goodwill
Intangible Assets
The following table details the company’s intangible asset balances by major asset class.
| ($ in millions) | ||||||||||
| Gross Carrying | Accumulated | Net Carrying | ||||||||
| At December 31, 2013: | Amount | Amortization | Amount | |||||||
| Intangible asset class | ||||||||||
| Capitalized software | $ | 1,494 | $ | (699) | $ | 794 | ||||
| Client relationships | 2,148 | (977) | 1,171 | |||||||
| Completed technology | 2,910 | (1,224) | 1,687 | |||||||
| In-process R&D | 13 | — | 13 | |||||||
| Patents/trademarks | 358 | (154) | 204 | |||||||
| Other* | 7 | (5) | 2 | |||||||
| Total | $ | 6,930 | $ | (3,059) | $ | 3,871 | ||||
| ($ in millions) | |||||||||||
| Gross Carrying | Accumulated | Net Carrying | |||||||||
| At December 31, 2012: | Amount | Amortization | Amount | ||||||||
| Intangible asset class | |||||||||||
| Capitalized software | $ | 1,527 | $ | (665) | $ | 861 | |||||
| Client relationships | 2,103 | (961) | 1,142 | ||||||||
| Completed technology | 2,709 | (1,112) | 1,597 | ||||||||
| In-process R&D | 28 | — | 28 | ||||||||
| Patents/trademarks | 281 | (127) | 154 | ||||||||
| Other* | 31 | (27) | 3 | ||||||||
| Total | $ | 6,679 | $ | (2,892) | $ | 3,787 | |||||
* Other intangibles are primarily acquired proprietary and nonproprietary business processes, methodologies and systems.
The net carrying amount of intangible assets increased $84 million during the year ended December 31, 2013, primarily due to intangible asset additions resulting from acquisitions, offset by amortization. There was no impairment of intangible assets recorded in 2013 and 2012.
Total amortization was $1,351 million and $1,284 million for the years ended December 31, 2013 and 2012, respectively. The aggregate amortization expense for acquired intangible assets (excluding capitalized software) was $767 million and $709 million for the years ended December 31, 2013 and 2012, respectively. In addition, in 2013 the company retired $1,177 million of fully amortized intangible assets, impacting both the gross carrying amount and accumulated amortization by this amount.
The amortization expense for each of the five succeeding years relating to intangible assets currently recorded in the Consolidated Statement of Financial Position is estimated to be the following at December 31, 2013:
| ($ in millions) | |||||||||||
| Capitalized | Acquired | ||||||||||
| Software | Intangibles | Total | |||||||||
| 2014 | $ | 484 | $ | 784 | $ | 1,267 | |||||
| 2015 | 247 | 637 | 884 | ||||||||
| 2016 | 64 | 595 | 660 | ||||||||
| 2017 | — | 477 | 477 | ||||||||
| 2018 | — | 322 | 322 | ||||||||
Goodwill
The changes in the goodwill balances by reportable segment, for the years ended December 31, 2013 and 2012, are as follows:
| ($ in millions) | ||||||||||||||||||
| Foreign | ||||||||||||||||||
| Currency | ||||||||||||||||||
| Balance | Purchase | Translation | Balance | |||||||||||||||
| January 1, | Goodwill | Price | And Other | December 31, | ||||||||||||||
| Segment | 2013 | Additions | Adjustments | Divestitures | Adjustments | 2013 | ||||||||||||
| Global Business Services | $ | 4,357 | $ | — | $ | (0) | $ | (3) | $ | (21) | $ | 4,334 | ||||||
| Global Technology Services | 2,916 | 1,246 | 17 | — | (50) | 4,129 | ||||||||||||
| Software | 20,405 | 987 | 11 | (4) | (279) | 21,121 | ||||||||||||
| Systems and Technology | 1,568 | 13 | 33 | — | (14) | 1,601 | ||||||||||||
| Total | $ | 29,247 | $ | 2,246 | $ | 61 | $ | (7) | $ | (363) | $ | 31,184 | ||||||
| ($ in millions) | ||||||||||||||||||
| Foreign | ||||||||||||||||||
| Currency | ||||||||||||||||||
| Balance | Purchase | Translation | Balance | |||||||||||||||
| January 1, | Goodwill | Price | And Other | December 31, | ||||||||||||||
| Segment | 2012 | Additions | Adjustments | Divestitures | Adjustments | 2012 | ||||||||||||
| Global Business Services | $ | 4,313 | $ | 5 | $ | (0) | $ | (2) | $ | 42 | $ | 4,357 | ||||||
| Global Technology Services | 2,646 | 264 | — | (0) | 6 | 2,916 | ||||||||||||
| Software | 18,121 | 2,182 | (30) | (6) | 137 | 20,405 | ||||||||||||
| Systems and Technology | 1,133 | 443 | (0) | (14) | 6 | 1,568 | ||||||||||||
| Total | $ | 26,213 | $ | 2,894 | $ | (30) | $ | (22) | $ | 192 | $ | 29,247 | ||||||
Purchase price adjustments recorded in 2013 and 2012 were related to acquisitions that were completed on or prior to December 31, 2012 or December 31, 2011, respectively, and were still subject to the measurement period that ends at the earlier of 12 months from the acquisition date or when information becomes available. There were no goodwill impairment losses recorded in 2013 or 2012 and the company has no accumulated goodwill impairment losses.