Goodwill and Other Intangible Assets

3 Months Ended

Jul. 01, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The following table summarizes the changes in the carrying amount of goodwill by segment for the three months ended July 1, 2016:



(in millions)	GBS			GIS			Total
Goodwill, gross	$	1,615		$	2,424		$	4,039
Accumulated impairment losses	(701		)	(2,061		)	(2,762		)
Balance as of April 1, 2016, net	914			363			1,277

Additions	590			31			621
Foreign currency translation	(77		)	(4		)	(81		)

Goodwill, gross	2,128			2,451			4,579
Accumulated impairment losses	(701		)	(2,061		)	(2,762		)
Balance as of July 1, 2016, net	$	1,427		$	390		$	1,817

The fiscal 2017 additions to goodwill are due to the acquisition of Xchanging. The foreign currency translation amount reflects the impact of currency movements on non-U.S. dollar-denominated goodwill balances.

The Company tests goodwill for impairment on an annual basis, as of the first day of the second fiscal quarter. An impairment test is also performed if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying amount. At the end of the first three months of fiscal 2017, the Company assessed whether there were events or changes in circumstances that would more likely than not reduce the fair value of any of its reporting units below their carrying amount. The Company concluded that there have been no such indicators and, therefore, it was unnecessary to perform an interim goodwill impairment test as of July 1, 2016.

Other Intangible Assets

A summary of amortizable intangible assets is as follows:



	As of July 1, 2016
(in millions)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Software	$	2,414	$	1,560	$	854
Outsourcing contract costs	834		503		331
Customer and other intangible assets	928		217		711
Total intangible assets	$	4,176	$	2,280	$	1,896



	As of April 1, 2016
(in millions)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Software	$	2,243	$	1,531	$	712
Outsourcing contract costs	828		494		334
Customer and other intangible assets	485		203		282
Total intangible assets	$	3,556	$	2,228	$	1,328

Total intangible assets amortization was $80 million and $71 million for the three months ended July 1, 2016 and July 3, 2015, respectively. These estimates included reductions of revenue for amortization of outsourcing contract cost premiums of $3 million and $3 million, respectively. Amortization expense related to capitalized software, included within total intangible amortization, was $43 million and $41 million for the three months ended July 1, 2016 and July 3, 2015, respectively. Estimated future amortization expense related to intangible assets as of July 1, 2016 is as follows:



Fiscal year	(in millions)
Remainder of 2017	$	285
2018	$	315
2019	$	287
2020	$	245
2021	$	196

During the three months ended July 3, 2015, CSC sold certain fully amortized intangible assets to a third party and recorded a $31 million gain on sale as a reduction of cost of sales in its GIS segment. There were no sales of intangible assets to a third party in the first three months of fiscal 2017.

- 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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