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Goodwill and Intangible Assets
 9 Months Ended
Aug. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Intangible Assets
Goodwill
Goodwill, which is all attributed to our Investment Banking and Capital Markets reportable business segment, amounted to $1.63 billion and $1.65 billion at August 31, 2022 and November 30, 2021, respectively.
The following table is a summary of the changes to goodwill for the nine months ended August 31, 2022 (in thousands):
Balance at November 30, 2021$1,645,317 
Currency translation and other adjustments(12,077)
Balance at August 31, 2022$1,633,240 
Goodwill Impairment Testing
A reporting unit is an operating segment or one level below an operating segment. The quantitative goodwill impairment test is performed at the level of the reporting unit. The fair value of each reporting unit is compared with its carrying value, including goodwill and allocated intangible assets. If the fair value is in excess of the carrying value, the goodwill for the reporting unit is considered not to be impaired. If the fair value is less than the carrying value, then an impairment loss is recognized for the amount by which the carrying value of the reporting unit exceeds the reporting unit’s fair value. Allocated tangible equity plus allocated goodwill and intangible assets are used for the carrying amount of each reporting unit. The amount of tangible equity allocated to a reporting unit is based on our cash capital model deployed in managing our businesses, which seeks to approximate the capital a business would require if it were operating independently. Intangible assets are allocated to a reporting unit based on either specifically identifying a particular intangible asset as pertaining to a reporting unit or, if shared among reporting units, based on an assessment of the reporting unit’s benefit from the intangible asset in order to generate results.
Estimating the fair value of a reporting unit requires management judgment. Estimated fair values for our reporting units were determined using a market valuation method that incorporates price-to-earnings and price-to-book multiples of comparable public companies. Under the market valuation approach, the key assumptions are the selected multiples and our internally developed projections of future profitability, growth and return on equity for each reporting unit. In addition, as the fair values determined under the market valuation approach represent a noncontrolling interest, we applied a control premium to arrive at the estimated fair value of each reporting unit on a controlling basis. We engaged an independent valuation specialist to assist us in our valuation process at August 1, 2022.
Our annual goodwill impairment testing at August 1, 2022 did not indicate any goodwill impairment in any of our reporting units. All of our goodwill is allocated to our Investment Banking, Equities and Fixed Income reporting units, which are part of our Investment Banking and Capital Markets reportable business segment, for which the results of our assessment indicated that these reporting units had a fair value in excess of their carrying amounts based on current projections.
Intangible Assets
Intangible assets are included in Other assets in our Consolidated Statements of Financial Condition. The following tables present the gross carrying amount, changes in carrying amount, net carrying amount and weighted average amortization period of identifiable intangible assets at August 31, 2022 and November 30, 2021 (dollars in thousands):
August 31, 2022Weighted average remaining lives (years)
Gross costImpairment lossesAccumulated amortizationNet carrying amount
Customer relationships$124,158 $— $(86,971)$37,187 8.5
Trade name126,624 — (34,426)92,198 25.5
Exchange and clearing organization membership interests and registrations
7,404 (39)— 7,365 N/A
Total
$258,186 $(39)$(121,397)$136,750 
November 30, 2021Weighted average remaining lives (years)
Gross costAccumulated amortizationNet carrying amount
Customer relationships $125,921 $(83,979)$41,942 9.0
Trade name 128,753 (32,244)96,509 26.3
Exchange and clearing organization membership interests and registrations7,732 — 7,732 N/A
Total
$262,406 $(116,223)$146,183 
We performed our annual impairment testing of intangible assets with an indefinite useful life, which consists of exchange and clearing organization membership interests and registrations, at August 1, 2022. We utilized quantitative assessments of membership interests and registrations that have available quoted sales prices as well as certain other membership interests and registrations that have declined in utilization and qualitative assessments were performed on the remainder of our indefinite-life intangible assets. In applying our quantitative assessments, we recognized impairment losses on certain exchange membership interests and registrations. With regard to our qualitative assessments of the remaining indefinite life intangible assets, based on our assessments of market conditions, the utilization of the assets and the replacement costs associated with the assets, we have concluded that it is not more likely than not that the intangible assets are impaired.
Amortization Expense
For finite life intangible assets, aggregate amortization expense amounted to $2.0 million and $7.0 million for the three and nine months ended August 31, 2022, respectively, and $3.0 million and $9.0 million for the three and nine months ended August 31, 2021, respectively. These expenses are included in Other expenses in our Consolidated Statements of Earnings.
The estimated future amortization expense for the next five fiscal years is as follows (in thousands):
Remainder of fiscal year 2022$2,065 
Year ending November 30, 20238,258 
Year ending November 30, 20248,258 
Year ending November 30, 20258,258 
Year ending November 30, 20268,258