INTANGIBLE ASSETS INCLUDING GOODWILL

3 Months Ended

Jun. 30, 2023

INTANGIBLE ASSETS INCLUDING GOODWILL

INTANGIBLE ASSETS INCLUDING GOODWILL

NOTE 8. INTANGIBLE ASSETS INCLUDING GOODWILL

Intangible Assets

The following tables present the Company’s intangible asset balances by major asset class.

	At June 30, 2023						At March 31, 2023
	Gross Carrying		Accumulated		Net Carrying		Gross Carrying		Accumulated		Net Carrying
(Dollars in millions)	Amount		Amortization		Amount		Amount		Amortization		Amount
Capitalized software	$	117	$	(19)	$	98	$	83	$	(15)	$	68
Customer relationships*		224		(146)		78		232		(141)		91
Completed technology		20		(20)		—		20		(20)		—
Patents and trademarks*		18		(6)		11		18		(6)		13
Total	$	379	$	(191)	$	187	$	353	$	(182)	$	171

* Amounts include effects from foreign currency translation.

The net carrying amount of intangible assets increased by $16 million during the three months ended June 30, 2023, primarily due to additions in capitalized software, partially offset by amortization and foreign currency translation. The aggregate intangible asset amortization expense was $11 million and $14 million for the three months ended June 30, 2023 and 2022, respectively. This included amortization of capitalized software of $4 million for the three months ended June 30, 2023, which was reported in “Depreciation of property, equipment and capitalized software” on the Consolidated Statement of Cash Flows.

The future amortization expense relating to intangible assets currently recorded in the Consolidated Balance Sheet was estimated to be the following at June 30, 2023:

	Capitalized		Customer		Patents and
(Dollars in millions)	Software		Relationships		Trademarks		Total
Year ending March 31:
2024 (remaining nine months)	$	21	$	20	$	2	$	44
2025		29		22		3		55
2026		27		18		3		48
2027		21		15		3		39
2028		—		1		—		1
Thereafter		—		1		—		1

Goodwill

The changes in the goodwill balances by segment for the three months ended June 30, 2023 were as follows:

			Additions and
(Dollars in millions)	Balance at		Other		Balance at
Segment	March 31, 2023		Adjustments*		June 30, 2023
United States	$	—	$	—	$	—
Japan		495		(4)		490
Principal Markets		142		—		142
Strategic Markets		176		—		176
Total	$	812	$	(4)		807

* Primarily driven by foreign currency translation.

There were no goodwill impairment losses recorded for the three months ended June 30, 2023 and 2022. Management reviews goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable by first assessing qualitative factors to determine if it is more likely than not that fair value is less than carrying value. Cumulatively, the Company has recorded $469 million in goodwill impairment charges within its former EMEA ($293 million) and current United States ($176 million) reporting units.