GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETSAs previously discussed in Note 2 – Acquisition of Business, in May 2021 the Company increased its investment in DECIEM, which resulted in the inclusion of additional goodwill of $1,295 million, amortizable intangible assets (customer lists) of $701 million with amortization periods of 7 years to 14 years, and non-amortizable intangible assets (trademarks) of $1,216 million. Goodwill associated with the acquisition is primarily attributable to the future revenue growth opportunities associated with sales growth in the skin care category, as well as the value associated with DECIEM's assembled workforce. As such, the goodwill has been allocated to the Company’s skin care product category. The goodwill recorded in connection with this acquisition will not be deductible for tax purposes. These amounts are provisional pending finalization of the opening balance sheet, the final valuation report, and allocation of the total consideration transferred.

Goodwill

The following table presents goodwill by product category and the related change in the carrying amount:

(In millions)	Skin Care		Makeup		Fragrance		Hair Care		Total
Balance as of June 30, 2021
Goodwill	$	1,786	$	1,214	$	262	$	355	$	3,617
Accumulated impairments	(141)		(830)		(30)		—		(1,001)
	1,645		384		232		355		2,616
Goodwill measurement period adjustment	12		—		—		—		12
Translation adjustments, goodwill	(52)		—		(5)		—		(57)
Translation adjustments, accumulated impairments	1		—		—		—		1
	(39)		—		(5)		—		(44)
Balance as of December 31, 2021
Goodwill	1,746		1,214		257		355		3,572
Accumulated impairments	(140)		(830)		(30)		—		(1,000)
	$	1,606	$	384	$	227	$	355	$	2,572

Other Intangible Assets

Other intangible assets consist of the following:

	December 31, 2021						June 30, 2021
(In millions)	Gross Carrying Value		Accumulated Amortization		Total Net Book Value		Gross Carrying Value		Accumulated Amortization		Total Net Book Value
Amortizable intangible assets:
Customer lists and other	$	2,208	$	622	$	1,586	$	2,273	$	544	$	1,729
License agreements	43		43		—		43		43		—
	$	2,251	$	665	1,586		$	2,316	$	587	1,729
Non-amortizable intangible assets:
Trademarks and other					2,297						2,366
Total intangible assets					$	3,883					$	4,095

The aggregate amortization expense related to amortizable intangible assets was $39 million and $27 million for the three months ended December 31, 2021 and 2020, respectively, and $84 million and $52 million for the six months ended December 31, 2021 and 2020, respectively.

The estimated aggregate amortization expense for the remainder of fiscal 2022 and for each of the next four fiscal years is as follows:

	Fiscal
(In millions)	2022		2023		2024		2025		2026
Estimated aggregate amortization expense	$	77	$	155	$	154	$	154	$	154

Impairment Testing During the Six Months Ended December 31, 2020

During November 2020, given the actual and the estimate of the potential future impacts relating to the uncertainty of the duration and severity of COVID-19 impacting the Company and lower than expected results from geographic expansion, the Company made further revisions to the internal forecasts relating to its GLAMGLOW reporting unit. The Company concluded that the changes in circumstances in this reporting unit triggered the need for an interim impairment review of its trademark and goodwill. These changes in circumstances were also an indicator that the carrying amounts of GLAMGLOW's long-lived assets, including customer lists, may not be recoverable. Accordingly, the Company performed an interim impairment test for the trademark and a recoverability test for the long-lived assets as of November 30, 2020. The Company concluded that the carrying value of the trademark for GLAMGLOW exceeded its estimated fair value, which was determined utilizing the relief-from-royalty method to determine discounted projected future cash flows, and recorded an impairment charge of $21 million. In addition, the Company concluded that the carrying value of the GLAMGLOW customer lists intangible asset was fully impaired and recorded an impairment charge of $6 million. The fair value of all other long-lived assets of GLAMGLOW exceeded their carrying values and were not impaired as of November 30, 2020. After adjusting the carrying values of the trademark and customer lists intangible assets, the Company completed an interim quantitative impairment test for goodwill and recorded a goodwill impairment charge of $54 million, reducing the carrying value of goodwill for the GLAMGLOW reporting unit to zero. The fair value of the GLAMGLOW reporting unit was based upon an equal weighting of the income and market approaches, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows, as well as valuation multiples derived from comparable publicly traded companies that are applied to operating performance of the reporting unit. The impairment charges for the three and six months ended December 31, 2020 were reflected in the skin care product category and in the Americas region. As of December 31, 2020, the remaining carrying value of the trademark related to the GLAMGLOW reporting unit was $36 million.