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Goodwill and Intangible Assets, net | 9 Months Ended
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Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill
| Engineered Materials |  |  |  | Acetyl Chain |  | Total |
| (In $ millions) |
As of December 31, 2023 | 6,602 |  |  |  |  | 375 |  |  | 6,977 |  |
Exchange rate changes | 17 |  |  |  |  | 3 |  |  | 20 |  |
As of September 30, 2024(1) | 6,619 |  |  |  |  | 378 |  |  | 6,997 |  |
______________________________ (1)There were no accumulated impairment losses as of September 30, 2024. The Company assesses the recoverability of the carrying amount of its reporting unit goodwill either qualitatively or quantitatively annually during the third quarter of its fiscal year using June 30 balances or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be fully recoverable. The Company completed qualitative evaluations on its reporting units, with the exception of the engineered materials reporting unit, and concluded that it was more likely than not that the fair value of these reporting units exceeded their carrying value. During the three months ended September 30, 2024, the Company experienced decreased demand, identified near-term negative trends in the automotive and industrial end-markets and experienced other challenging current macroeconomic conditions. Therefore, the engineered materials reporting unit was tested quantitatively using an equal weighting of the income approach based on the discounted estimated future cash flows of the reporting unit and market approach using the guideline public company method. The key assumptions used in the discounted cash flow valuation model include the discount rate, growth rate, tax rate, cash flow projections and terminal value rate. The discount rate was based on market participant data, including the Company's weighted average cost of capital adjusted for risks specific to the reporting unit. The growth rates and cash flow projections were based on historical trends and expected growth drivers such as macroeconomic trends in the industries and territories in which the reporting unit operates. The tax rate considers the operating structure of the reporting unit and tax rates in jurisdictions in which the reporting unit operates. A terminal value rate was applied to the final year of the projected period to reflect continued stable, perpetual growth. Under the market approach, the Company utilized earnings multiples for public companies similar to the engineered materials reporting unit adjusted for a control premium. Based on the quantitative test, the estimated fair value of the engineered materials reporting unit exceeded the carrying value of its underlying assets. Therefore, the Company did not record an impairment loss to goodwill during the nine months ended September 30, 2024. Although no impairment of the engineered materials reporting unit was identified, the estimated fair value exceeded its carrying value by less than 10%. While the Company believes the assumptions used in the impairment test were reasonable, changes in market conditions or key assumptions made in future quantitative assessments, including discount rates, growth rates, tax rates, cash flow projections and terminal value rates, could negatively impact the results of future impairment testing for any of the Company's reporting units and could result in the recognition of an impairment charge. Such charge could be material to the statements of operations and balance sheets in the period(s) recorded. Intangible Assets, Net Finite-lived intangible assets are as follows:
| Licenses |  | Customer- Related Intangible Assets |  | Developed Technology |  | Covenants Not to Compete and Other |  | Total |
| (In $ millions) |
Gross Asset Value |  |  |  |  |  |  |  |  |  |
As of December 31, 2023 | 41 |  |  | 2,437 |  |  | 601 |  |  | 55 |  |  | 3,134 |  |
Exchange rate changes | — |  |  | 33 |  |  | 3 |  |  | — |  |  | 36 |  |
As of September 30, 2024 | 41 |  |  | 2,470 |  |  | 604 |  |  | 55 |  |  | 3,170 |  |
Accumulated Amortization |  |  |  |  |  |  |  |  |  |
As of December 31, 2023 | (38) |  |  | (639) |  |  | (95) |  |  | (42) |  |  | (814) |  |
Amortization | — |  |  | (87) |  |  | (31) |  |  | (1) |  |  | (119) |  |
Exchange rate changes | — |  |  | (8) |  |  | (1) |  |  | — |  |  | (9) |  |
As of September 30, 2024 | (38) |  |  | (734) |  |  | (127) |  |  | (43) |  |  | (942) |  |
Net book value | 3 |  |  | 1,736 |  |  | 477 |  |  | 12 |  |  | 2,228 |  |
Indefinite-lived intangible assets are as follows:
| Trademarks and Trade Names |
| (In $ millions) |
As of December 31, 2023 | 1,655 |  |
Impairment losses | (34) |  |
Exchange rate changes | 9 |  |
As of September 30, 2024 | 1,630 |  |
The Company assesses the recoverability of the carrying amount of its indefinite-lived intangible assets either qualitatively or quantitatively annually during the third quarter of its fiscal year using June 30 balances or whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company completed qualitative evaluations on its indefinite-lived intangible assets, with the exception of those assigned to the engineered materials reporting unit, and concluded that it was more likely than not that the fair value of these indefinite-lived intangible assets exceeded their carrying value. Indefinite-lived intangible assets assigned to the engineered materials reporting unit were tested quantitatively utilizing the relief from royalty method under the income approach to determine the estimated fair value for each indefinite-lived intangible asset. The key assumptions used in this model include discount rates, royalty rates, growth rates, tax rates, sales projections and terminal value rates. The discount rate was based on the Company's weighted average return on assets adjusted for risks specific to the indefinite-lived intangible assets. Royalty rates are established by management using the most recent third party valuations and are periodically substantiated by third-party valuation consultants. The growth rates and sales projections were based on historical trends and expected growth drivers such as macroeconomic trends in the industries and territories in which the indefinite-lived intangible assets operate. The tax rate considers the operating structure of the Company and tax rates in jurisdictions in which the indefinite-lived intangible assets operate. A terminal value rate was applied to the final year of the projected period to reflect continued stable, perpetual growth. In connection with the Company's annual indefinite-lived intangible assets impairment assessment, the Company recorded a non-cash impairment loss of $34 million in Other charges (gains), net (Note 1 8) to impair the net book value of certain trade names, primarily Zytel®, included in the Engineered Materials segment. Other than these trade names, the estimated fair value of the Company's indefinite-lived intangible assets exceeded the carrying value of the underlying assets. While the Company believes the assumptions used in the impairment tests were reasonable, changes in market conditions or key assumptions made in future quantitative assessments, including discount rates, royalty rates, growth rates, tax rates, sales projections and terminal value rates, could negatively impact the results of future impairment testing and could result in the recognition of an impairment charge. Such charge could be material to the statements of operations and balance sheets in the period(s) recorded. During the nine months ended September 30, 2024, the Company did not renew or extend any intangible assets. Estimated amortization expense for the succeeding five fiscal years is as follows:
| (In $ millions)
2025 | 161 |
2026 | 161 |
2027 | 160 |
2028 | 160 |
2029 | 155 |

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-30/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-20/tableOfContent + Details
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