Goodwill and other intangible assets

12 Months Ended

Dec. 31, 2011

Goodwill and other intangible assets

Goodwill and other intangible assets

Goodwill

end of	2011				2010
	Private Banking	Investment Banking	Asset Manage- ment	Credit Suisse Group	Private Banking	Investment Banking	Asset Manage- ment	Credit Suisse Group
Gross amount of goodwill (CHF million)
Balance at beginning of period	749	6,429	1,489	8,667	789	6,925	1,635	9,349
Foreign currency translation impact	(8)	16	(4)	4	(40)	(496)	(145)	(681)
Other	2	0	0	2	0	0	(1)	(1)
Balance at end of period	743	6,445	1,485	8,673	749	6,429	1,489	8,667
Accumulated impairment (CHF million)
Balance at beginning of period	0	82	0	82	0	82	0	82
Balance at end of period	0	82	0	82	0	82	0	82
Net book value (CHF million)
Net book value	743	6,363	1,485	8,591	749	6,347	1,489	8,585

In accordance with US GAAP, the Group continually assesses whether or not there has been a triggering event. As of December 31, 2011, the Group’s market capitalization was below book value and as of December 31, 2010, the Group’s market capitalization was above book value.

In estimating the fair value of its reporting units the Group generally applied a market approach where consideration is given to price to projected earning multiples or price to book value multiples for similarly traded companies and prices paid in recent transactions that have occurred in its industry or in related industries.

In determining the estimated fair value, the Group relied upon its three-year strategic business plan which included significant management assumptions and estimates based on its view of current and future economic conditions and regulatory changes.

Based on its goodwill impairment analysis performed as of December 31, 2011, the Group concluded that the estimated fair value for the four reporting units within its Private Banking and Asset Management segments substantially exceeded their related carrying values and no impairment was necessary as of December 31, 2011.

There was also no impairment necessary for the Group’s Investment Banking reporting unit as the estimated fair value exceeded its carrying value by 9%. The goodwill allocated to this reporting unit has become more sensitive to an impairment as the valuation of the reporting unit is highly correlated with economic and financial market conditions, client trading and investing activity and the regulatory environment in which it operates. The Group engaged the services of an independent valuation specialist to assist in the valuation of the reporting unit as of December 31, 2011 using a combination of the market approach and income approach. Under the market approach, consideration is given to price to projected earnings multiples or price to book value multiples for similarly traded companies and prices paid in recent transactions that have occurred in its industry or in related industries. Under the income approach, a discount rate was applied that reflects the risk and uncertainty related to the reporting unit’s projected cash flows.

The results of the impairment evaluation of the Investment Banking reporting unit’s goodwill would be significantly impacted by adverse changes in the underlying parameters used in the valuation process. If actual outcomes adversely differ by a sufficient margin from its best estimates of the key economic assumptions and associated cash flows applied in the valuation of the reporting unit, the Group could potentially incur material impairment charges in the future with respect to the CHF 6,363 million of goodwill recorded in Investment Banking.

As a result of acquisitions, the Group has recorded goodwill as an asset in its consolidated balance sheets, the most significant component of which arose from the acquisition of Donaldson, Lufkin & Jenrette Inc. in 2000. During 2011 and 2010, there were no acquisitions that generated goodwill upon consolidation.

Other intangible assets

	2011			2010
end of	Gross carrying amount	Accumu- lated amorti- zation	Net carrying amount	Gross carrying amount	Accumu- lated amorti- zation	Net carrying amount
Other intangible assets (CHF million)
Tradenames/trademarks	26	(21)	5	26	(21)	5
Client relationships	369	(193)	176	377	(168)	209
Other	7	(1)	6	0	0	0
Total amortizing other intangible assets	402	(215)	187	403	(189)	214
Non-amortizing other intangible assets	101	–	101	98	–	98
of which mortgage servicing rights, at fair value	70	–	70	66	–	66
Total other intangible assets	503	(215)	288	501	(189)	312

Additional information

in	2011	2010	2009
Aggregate amortization and impairment (CHF million)
Aggregate amortization	30	34	42
Impairment	0	1	7

Estimated amortization

Estimated amortization (CHF million)
2012	27
2013	24
2014	23
2015	22
2016	18