XML 33 R19.htm IDEA: XBRL DOCUMENT
v3.23.1

Goodwill and Intangible Assets, Net | 12 Months Ended
--- | ---
Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill Changes in the carrying amount of goodwill were as follows:
(In millions) | U.S. Pharmaceutical |  | Prescription Technology Solutions |  | Medical-Surgical Solutions |  | International |  | Total
Balance, March 31, 2021 | $ | 3,963 |  |  | $ | 1,542 |  |  | $ | 2,453 |  |  | $ | 1,535 |  |  | $ | 9,493 |
Goodwill acquired | — |  |  | — |  |  | — |  |  | 5 |  |  | 5 |
Foreign currency translation adjustments, net | (40) |  |  | — |  |  | — |  |  | (7) |  |  | (47) |
Balance, March 31, 2022 | 3,923 |  |  | 1,542 |  |  | 2,453 |  |  | 1,533 |  |  | 9,451 |
Goodwill acquired | 160 |  |  | 463 |  |  | — |  |  | 5 |  |  | 628 |
Foreign currency translation adjustments, net | (21) |  |  | — |  |  | — |  |  | (99) |  |  | (120) |
Other adjustments | (12) |  |  | — |  |  | — |  |  | — |  |  | (12) |
Balance, March 31, 2023 | $ | 4,050 |  |  | $ | 2,005 |  |  | $ | 2,453 |  |  | $ | 1,439 |  |  | $ | 9,947 |
Goodwill Impairment Charges The Company evaluates goodwill for impairment on an annual basis and at an interim date, if indicators of potential impairment exist. Goodwill impairment testing is conducted at the reporting unit level, which is generally defined as an operating segment or one level below an operating segment (also known as a component), for which discrete financial information is available and segment management regularly reviews the operating results of that reporting unit. During the first quarter of fiscal 2023, the Company voluntarily changed its annual goodwill impairment testing date from October 1 st to April 1 st to align with a change in the timing of the Company’s annual long-term planning process. Accordingly, management determined that the change in accounting principle is preferable under the circumstance. This change has been applied prospectively from April 1, 2022, as a retrospective application is deemed impracticable due to the inability to objectively determine the assumptions and significant estimates used in earlier periods without the benefit of hindsight. This change was not material to the Company’s consolidated financial statements as it did not delay, accelerate, or avoid any potential goodwill impairment charge. The fair value of the reporting units is determined using a combination of an income approach based on a DCF model and a market approach based on appropriate valuation multiples observed for the reporting unit’s guideline public companies. Fair value estimates result from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions that have been deemed reasonable by management as of the measurement date. Any material changes in key assumptions, including failure to improve operations of certain retail pharmacy stores, additional government reimbursement reductions, deterioration in the financial markets, an increase in interest rates, or an increase in the cost of equity financing by market participants within the industry, or other unanticipated events and circumstances, may affect such estimates. The discount rates are the weighted-average cost of capital measuring the reporting unit’s cost of debt and equity financing weighted by the percentage of debt and percentage of equity in a company’s target capital. The unsystematic risk premium is an input factor used in calculating the discount rate that specifically addresses uncertainty related to the reporting unit’s future cash flow projections. Fair value assessments of the reporting unit are considered a Level 3 measurement due to the significance of unobservable inputs developed using company-specific information. The annual impairment testing performed for fiscal 2023, fiscal 2022, and fiscal 2021 did not indicate any impairment of goodwill. In the second quarter of fiscal 2021, the Company implemented a new segment reporting structure which resulted in the Company’s current four reportable segments: U.S. Pharmaceutical, RxTS, Medical-Surgical Solutions, and International. These reportable segments encompass all operating segments of the Company. This segment change prompted changes in multiple reporting units across the Company. As a result, goodwill included in impacted reporting units was reallocated using a relative fair value approach and assessed for impairment both before and after the reallocation. The Company recorded a goodwill impairment charge of $69 million in fiscal 2021 as the estimated fair value of the former Europe Retail Pharmacy reporting unit was lower than its reassigned carrying value based on changes in the composition of the Europe Retail Pharmacy reporting unit within the International segment. This charge was recorded in “Goodwill impairment charges” in the Consolidated Statements of Operations. At March 31, 2023 and 2022, the balance of goodwill in the International segment primarily relates to the Company’s McKesson Canada reporting unit. Refer to Financial Note 15, “Fair Value Measurements,” for more information on this nonrecurring fair value measurement. As of March 31, 2023 and 2022, accumulated goodwill impairment losses in the Company’s International segment were approximately $700 million. Most of the goodwill impairment for these reporting units was generally not deductible for income tax purposes. Intangible Assets Information regarding intangible assets were as follows:
| March 31, 2023 |  | March 31, 2022
(Dollars in millions) | Weighted- Average Remaining Amortization Period (Years) |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Customer relationships | 12 |  | $ | 2,971 |  |  | $ | (1,765) |  |  | $ | 1,206 |  |  | $ | 2,777 |  |  | $ | (1,691) |  |  | $ | 1,086 |  |
Service agreements | 10 |  | 1,137 |  |  | (623) |  |  | 514 |  |  | 1,085 |  |  | (573) |  |  | 512 |
Trademarks and trade names | 12 |  | 833 |  |  | (430) |  |  | 403 |  |  | 819 |  | (386) |  |  | 433 |
Technology | 11 |  | 264 |  |  | (129) |  |  | 135 |  |  | 128 |  | (116) |  |  | 12 |
Other | 10 |  | 193 |  |  | (174) |  |  | 19 |  |  | 187 |  | (171) |  |  | 16 |
Total |  |  | $ | 5,398 |  |  | $ | (3,121) |  |  | $ | 2,277 |  |  | $ | 4,996 |  |  | $ | (2,937) |  |  | $ | 2,059 |  | (1)
(1)Excludes net intangible assets of approximately $384 million related to the European divestiture activities discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures.” This amount was included under the caption “Assets held for sale” in the Consolidated Balance Sheet as of March 31, 2022. Amortization of these assets ceased upon classification as held for sale in the second and third quarters of fiscal 2022. All intangible assets were subject to amortization as of March 31, 2023 and 2022. Amortization expense of intangible assets was $236 million, $332 million, and $422 million for fiscal 2023, fiscal 2022, and fiscal 2021, respectively. Estimated annual amortization expense of intangible assets was as follows: $246 million, $240 million, $208 million, $201 million, and $197 million for fiscal 2024 through fiscal 2028, respectively, and $1.2 billion thereafter. Refer to Financial Note 2, “Business Acquisitions and Divestitures,” for a description of the goodwill and intangible assets recognized as part of the RxSS acquisition and formation of SCRI Oncology. Refer to Financial Note 3, “Restructuring, Impairment, and Related Charges, Net,” for more information on intangible asset impairment charges recorded in fiscal 2022 and fiscal 2021.

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI https://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration