Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

The changes in the carrying amount of goodwill for the nine months ended September 30, 2014 were as follows (in millions, unaudited):



Balance as of December 31, 2013	$	11,492
Goodwill acquired	4,072
Goodwill reclassified to assets held for sale	(71		)
Goodwill adjustment	(32		)
Balance as of September 30, 2014	$	15,461

Information regarding our acquisition-related intangible assets was as follows (in millions):



	As of December 31, 2013
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Patents and developed technology	$	7,282	$	2,102	$	5,180
Customer relationships	1,770		1,067		703
Trade names and other	534		351		183
Total	$	9,586	$	3,520	$	6,066

	As of September 30, 2014
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
	(unaudited)
Patents and developed technology	$	6,515	$	2,337	$	4,178
Customer relationships	1,405		1,127		278
Trade names and other	648		360		288
Total	$	8,568	$	3,824	$	4,744

Goodwill and intangible assets to be disposed of as a result of our Motorola Mobile disposition were included in "Assets held for sale" on the Consolidated Balance Sheet as of September 30, 2014 and accordingly, are not included in the table above. Amortization of these intangible assets was stopped as of the date they were deemed to be held for sale.

Amortization expense relating to acquisition-related intangible assets was $244 million and $769 million for the three and nine months ended September 30, 2013 and $285 million and $821 million for the three and nine months ended September 30, 2014. Such amounts do not include amortization expenses related to the intangible assets to be disposed of, which were included in "Net income (loss) from discontinued operations".

Additionally, in the third quarter of 2014, we recorded an impairment charge in "Cost of revenues" of $378 million related to a patent licensing royalty asset acquired in connection with the Motorola acquisition, which Google will retain subsequent to the disposal of Motorola Mobile. The asset was determined to be impaired due to prolonged decreased royalty payments and unpaid interest owed and was written down to its fair value during the quarter. Fair value was determined based on a discounted cash flow method and reflects a reduction in estimated future cash flows associated with the patent licensing royalty asset and falls within level 3 in fair value hierarchy.

As of September 30, 2014, expected amortization expense relating to acquisition-related intangible assets for each of the next five years and thereafter was as follows (in millions, unaudited):



Remainder of 2014	$	244
2015	852
2016	764
2017	686
2018	621
Thereafter	1,577
	$	4,744

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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