Assets held for sale

9 Months Ended

Mar. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure

2. Assets Held for Sale

We classify assets and liabilities (the “disposal group”) as held for sale when management commits to a plan to sell the disposal group in its present condition and at a price that is reasonable in relation to its current fair value. We also consider whether an active program to locate a buyer has been initiated and if it is probable that the sale will occur within one year without significant changes to the plan to sell. Upon classification of the disposal group as held for sale, we assess the assets for impairment and cease related depreciation and amortization.

On March 12, 2021, we signed a definitive agreement with Hellman & Friedman to sell our Cordis business for gross proceeds of $927 million in cash, subject to customary purchase price adjustments, and we will retain certain working capital accounts and certain liabilities. The transaction is expected to close in the first quarter of fiscal 2022, subject to customary closing conditions and regulatory clearances. Cardinal Health will retain liability associated with lawsuits related to inferior vena cava ("IVC") filters in the U.S. and Canada, as well as authority for these matters discussed in Note 6.

During the three months ended March 31, 2021, we met the criteria for the related assets and liabilities of the Cordis business to be classified as held for sale. In connection with the planned divestiture, we allocated $388 million of goodwill from the Medical Unit (within our Medical Segment) to the Cordis disposal group based on the estimated relative fair values of the business to be disposed of and the portion of the reporting unit that will be retained. We determined that the sale of the Cordis business does not meet the criteria to be classified as discontinued operations.

At March 31, 2021, the book value of the disposal group exceeded its fair value less costs to sell. Accordingly, we recognized a $58

million pre-tax write-down on the disposal group in impairments and (gain)/loss on disposal of assets in our condensed consolidated statement of earnings/(loss). This write-down includes a $2 million gain related to currency translation adjustments in accumulated other comprehensive income. We recorded a net tax expense of $7 million associated with the impact of the write-down and the required tax adjustments triggered by held for sale accounting.

The following table presents information related to the assets and liabilities that were classified as held for sale at March 31, 2021 related to the Cordis planned divestiture in the condensed consolidated balance sheets:

(in millions)	March 31, 2021
Cash and equivalents	$	86
Inventories, net	175
Property and equipment, net	88
Goodwill and other intangibles, net	779
Other assets	12
Write-down of assets held for sale	(58)
Total assets held for sale	$	1,082
Other accrued liabilities	$	59
Deferred income taxes and other liabilities	34
Total liabilities related to assets held for sale	$	93