Goodwill and intangible assets |
Goodwill and intangible assets
Goodwill
The table below provides a breakdown of goodwill by business.
| | | | | | | | | | | | | | Goodwill by business (in millions) | Investment Services |
| Investment Management |
| Other |
| Consolidated |
| Balance at Dec. 31, 2017 | $ | 8,389 |
| $ | 9,128 |
| $ | 47 |
| $ | 17,564 |
| Dispositions | — |
| (65 | ) | — |
| (65 | ) | Foreign currency translation | (56 | ) | (93 | ) | — |
| (149 | ) | Balance at Dec. 31, 2018 | $ | 8,333 |
| $ | 8,970 |
| $ | 47 |
| $ | 17,350 |
| Foreign currency translation | (1 | ) | 37 |
| — |
| 36 |
| Balance at Dec. 31, 2019 | $ | 8,332 |
| $ | 9,007 |
| $ | 47 |
| $ | 17,386 |
|
Total goodwill increased in 2019 compared with 2018 reflecting the impact of foreign currency translation on non-U.S. dollar denominated goodwill.
Intangible assets
The table below provides a breakdown of intangible assets by business.
| | | | | | | | | | | | | | Intangible assets – net carrying amount by business (in millions) | Investment Services |
| Investment Management |
| Other |
| Consolidated |
| Balance at Dec. 31, 2017 | $ | 888 |
| $ | 1,674 |
| $ | 849 |
| $ | 3,411 |
| Amortization | (129 | ) | (51 | ) | — |
| (180 | ) | Foreign currency translation | (1 | ) | (10 | ) | — |
| (11 | ) | Balance at Dec. 31, 2018 | $ | 758 |
| $ | 1,613 |
| $ | 849 |
| $ | 3,220 |
| Amortization | (80 | ) | (37 | ) | — |
| (117 | ) | Foreign currency translation | — |
| 4 |
| — |
| 4 |
| Balance at Dec. 31, 2019 | $ | 678 |
| $ | 1,580 |
| $ | 849 |
| $ | 3,107 |
|
Intangible assets decreased in 2019 compared with 2018 primarily reflecting amortization.
The table below provides a breakdown of intangible assets by type.
| | | | | | | | | | | | | | | | | | | | | | Intangible assets | Dec. 31, 2019 | | Dec. 31, 2018 | (in millions) | Gross carrying amount |
| Accumulated amortization |
| Net carrying amount |
| Remaining weighted- average amortization period | | Gross carrying amount |
| Accumulated amortization |
| Net carrying amount |
| Subject to amortization: (a) | | | | | | | | | Customer contracts—Investment Services | $ | 1,520 |
| $ | (1,214 | ) | $ | 306 |
| 10 years | | $ | 1,572 |
| $ | (1,186 | ) | $ | 386 |
| Customer relationships—Investment Management | 712 |
| (544 | ) | 168 |
| 11 years | | 899 |
| (699 | ) | 200 |
| Other | 64 |
| (16 | ) | 48 |
| 14 years | | 26 |
| (12 | ) | 14 |
| Total subject to amortization | 2,296 |
| (1,774 | ) | 522 |
| 10 years | | 2,497 |
| (1,897 | ) | 600 |
| Not subject to amortization: (b) | | | | | | | | | Tradenames | 1,293 |
| N/A |
| 1,293 |
| N/A | | 1,332 |
| N/A |
| 1,332 |
| Customer relationships | 1,292 |
| N/A |
| 1,292 |
| N/A | | 1,288 |
| N/A |
| 1,288 |
| Total not subject to amortization | 2,585 |
| N/A |
| 2,585 |
| N/A | | 2,620 |
| N/A |
| 2,620 |
| Total intangible assets | $ | 4,881 |
| $ | (1,774 | ) | $ | 3,107 |
| N/A | | $ | 5,117 |
| $ | (1,897 | ) | $ | 3,220 |
|
| | (a) | Excludes fully amortized intangible assets. |
| | (b) | Intangible assets not subject to amortization have an indefinite life. |
Estimated annual amortization expense for current intangibles for the next five years is as follows:
| | | | | | For the year ended Dec. 31, | Estimated amortization expense (in millions) | | 2020 | | $ | 104 |
| 2021 | | 81 |
| 2022 | | 63 |
| 2023 | | 52 |
| 2024 | | 45 |
|
Impairment testing
The goodwill impairment test is performed at least annually at the reporting unit level. Intangible assets not subject to amortization are tested for impairment annually or more often if events or circumstances indicate they may be impaired.
BNY Mellon’s three business segments include seven reporting units for which goodwill impairment testing is performed on an annual basis. The Investment Services segment is comprised of four reporting units; the Investment Management segment is comprised of two reporting units and one reporting unit is included in the Other segment. As a result of the annual goodwill impairment test of the seven reporting units conducted in the second quarter of 2019, no goodwill impairment was recognized.
|