The goodwill impairment test is performed at least annually at the reporting unit level. BNY Mellon’s business segments include six reporting units for which goodwill impairment testing is performed. As a result of the annual goodwill impairment test conducted in the second quarter of 2022, no goodwill impairment was recognized.

An interim test is performed when events or circumstances occur that may indicate that it is more likely than not that the fair value of any reporting unit may be less than its carrying value.

In the third quarter 2022, due to decreases in market values and the related outlook as well as increased market interest rates, we performed an interim goodwill impairment test of the Investment Management reporting unit which had $7.0 billion of allocated goodwill. The fair value of the Investment Management reporting unit was determined to be 7% below its carrying value, resulting in a goodwill impairment charge of $680 million. This goodwill impairment represents a non-cash charge and did not

affect BNY Mellon’s liquidity position, tangible common equity or regulatory capital ratios. We determined it was not necessary to perform an interim goodwill impairment test for our other reporting units.

We determined the fair value of the Investment Management reporting unit using an income approach based on management’s projections as of Sept 30, 2022. The discount rate applied to these cash flows was 10.5% compared with the 10% discount rate used in the annual impairment test conducted in the second quarter of 2022. The increase was driven by a higher risk free rate. Determining the fair value of a reporting unit is subject to uncertainty as it is reliant on estimates of cash flows that extend far into the future, and, by their nature, are difficult to estimate over such an extended time frame. The cash flow estimates for the Investment Management reporting unit are impacted by projections of the level and mix of assets under management, market values, operating margins and long-term growth rates. In the future, changes in the assumptions or the discount rate could produce a material non-cash goodwill impairment.

Intangible assets

The tables below provide a breakdown of intangible assets by business segment.


Intangible assets – net carrying amount by business segment (in millions)	Securities Services		Market and Wealth Services		Investment and Wealth Management		Other		Consolidated
Balance at Dec. 31, 2021	$	230	$	392	$	1,520	$	849	$	2,991

Amortization	(25)		(6)		(20)		—		(51)
Foreign currency translation	(8)		—		(30)		—		(38)
Balance at Sept. 30, 2022	$	197	$	386	$	1,470	$	849	$	2,902


Intangible assets – net carrying amount by business segment (in millions)	Securities Services		Market and Wealth Services		Investment and Wealth Management		Other		Consolidated
Balance at Dec. 31, 2020	$	194	$	414	$	1,555	$	849	$	3,012
Disposition	—		—		(6)		—		(6)
Amortization	(24)		(17)		(22)		—		(63)
Foreign currency translation	—		—		(2)		—		(2)
Balance at Sept. 30, 2021	$	170	$	397	$	1,525	$	849	$	2,941

The table below provides a breakdown of intangible assets by type.


Intangible assets	Sept. 30, 2022							Dec. 31, 2021
(dollars 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—Securities Services	$	733	$	(538)	$	195	11 years	$	747	$	(518)	$	229
Customer contracts—Market and Wealth Services	314		(299)		15		4 years	378		(356)		22
Customer relationships—Investment and Wealth Management	553		(456)		97		9 years	568		(456)		112
Other	47		(13)		34		14 years	47		(8)		39
Total subject to amortization	1,647		(1,306)		341		10 years	1,740		(1,338)		402
Not subject to amortization: (b)
Tradename	1,288		N/A		1,288		N/A	1,294		N/A		1,294
Customer relationships	1,273		N/A		1,273		N/A	1,295		N/A		1,295
Total not subject to amortization	2,561		N/A		2,561		N/A	2,589		N/A		2,589
Total intangible assets	$	4,208	$	(1,306)	$	2,902	N/A	$	4,329	$	(1,338)	$	2,991

(a) Excludes fully amortized intangible assets.

(b) Intangible assets not subject to amortization have an indefinite life.

N/A – Not applicable.

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)
2022		$	67
2023		57
2024		49
2025		42
2026		34

Intangible asset impairment testing

Intangible assets not subject to amortization are tested for impairment annually or more often if events or circumstances indicate they may be impaired.