GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Oct. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

7. GOODWILL AND OTHER INTANGIBLE ASSETS

The goodwill balances as of October 31, 2024, 2023 and 2022 and the movements in 2024 and 2023 for each of our reportable segments were as follows:


	CSG		EISG		Total
	(in millions)
Goodwill at October 31, 2022	$	1,022	$	560	$	1,582
Foreign currency translation impact	(1)		3		2
Goodwill arising from acquisitions	36		20		56
Goodwill at October 31, 2023	1,057		583		1,640
Foreign currency translation impact	2		8		10
Goodwill arising from acquisitions	181		557		738


Goodwill at October 31, 2024	$	1,240	$	1,148	$	2,388

There were no impairments of goodwill during the years ended October 31, 2024, 2023 and 2022. As of October 31, 2024, 2023 and 2022, accumulated impairment losses on goodwill were $709 million as recorded within the CSG reportable segment.

Other intangible assets as of October 31, 2024 and 2023 consisted of the following:


	October 31, 2024						October 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
	(in millions)
Developed technology	$	1,377	$	1,018	$	359	$	1,033	$	949	$	84
Backlog	37		25		12		19		17		2
Trademark/Tradename	38		36		2		36		33		3
Customer relationships	587		398		189		406		340		66

Total amortizable intangible assets	2,039		1,477		562		1,494		1,339		155
In-Process R&D	45		—		45		—		—		—
Total	$	2,084	$	1,477	$	607	$	1,494	$	1,339	$	155

In 2024, we recognized additions to goodwill and other intangible assets of $738 million and $582 million, respectively, based on the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed from the acquisition of ESI Group and other acquisition activity. See Note 2, “Acquisitions,” for additional information. During the year ended October 31, 2024, we transferred $15 million from in-process R&D to developed technology as projects were successfully completed.

During the year ended October 31, 2024, foreign exchange translation had a favorable impact of $8 million on other intangible assets. Amortization of other intangible assets was $138 million in 2024, $90 million in 2023 and $103 million in 2022. Estimated future amortization expense for our intangible assets as of October 31, 2024 is as follows:


	Amortization expense
	(in millions)
2025	$	125
2026	$	112
2027	$	101
2028	$	97
2029	$	89
Thereafter	$	38

Goodwill is assessed for impairment on a reporting unit basis, which is an operating segment or one level below an operating segment. We determine fair values for each of the reporting units using the market approach, when available and appropriate, or the income approach, or a combination of both. If multiple valuation methodologies are used, the results are weighted appropriately. Valuations using the market approach are derived from metrics of publicly traded comparable companies. The selections of comparable businesses are based on the markets in which our reporting units operate, giving consideration to risk profiles, size, geography, and diversity of products and services. Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. We use our internal forecasts to estimate future cash flows and include an estimate of long-term future growth rates based on our most recent views of the long-term outlook for each business.

During the fourth quarter of 2024, we performed our annual impairment test of goodwill for all our reporting units using a qualitative approach. Based on the results of our qualitative testing, we believe that it is more likely than not that the fair value of each reporting unit is greater than its respective carrying value.

As of October 31, 2024, we determined that no goodwill impairment exists and that the remaining goodwill is recoverable for all of our reporting units; however, there can be no assurance that goodwill will not be impaired in future periods. Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is possible that the judgments and estimates described above could change in future periods.

Other intangible assets with finite lives are assessed for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. No impairments of amortizable intangible assets were recorded during the years ended October 31, 2024, 2023 and 2022.

The authoritative accounting guidance allows a qualitative approach for testing indefinite-lived intangible assets for impairment, similar to the impairment testing guidance for goodwill. It allows the option to first assess qualitative factors (events and circumstances) that could have affected the significant inputs used in determining the fair value of the indefinite-lived intangible asset. The qualitative factors assist in determining whether it is more likely than not that the indefinite-lived intangible asset is impaired. An organization may choose to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to calculating its fair value. Our indefinite-lived intangible assets are generally in-process research and development (“IPR&D”) intangible assets. No impairments of indefinite-lived intangible assets were recorded in 2024. We had no IPR&D intangible assets as of October 31, 2023 and 2022.

We review long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate.