Goodwill Impairment

6 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill Impairment

Goodwill Impairment

In conjunction with the proposed Healthcare Technology Net Asset Exchange, we are evaluating strategic options for our EIS business, which is a reporting unit within our McKesson Technology Solutions segment. During the second quarter of 2017, we recorded a non-cash pre-tax charge of $290 million ($282 million after-tax) to impair the carrying value of this business’ goodwill. Most of the goodwill impairment is not deductible for income tax purposes. The impairment primarily resulted from a decline in estimated cash flows.

The goodwill impairment test requires us to compare the fair value of the reporting unit to the fair value of the reporting unit's net assets, excluding goodwill but including any unrecognized intangible assets, to determine the implied fair value of goodwill. The impairment charge was then determined by comparing the carrying value of the reporting unit’s goodwill with its implied fair value. As of September 30, 2016, the valuation of all assets and liabilities of the reporting unit used to calculate the implied fair value of goodwill was not complete. As a result, the recorded impairment charge is provisional and subject to further adjustments as we finalize our fair value assessments in the third quarter of 2017. At September 30, 2016, the remaining goodwill balance for this reporting unit was $124 million. Refer to Financial Note 15, “Fair Value Measurements,” for more information on this nonrecurring fair value measurement.