Goodwill and Other Intangible Assets

12 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Effective October 1, 2021, the Company's marine businesses previously included in the Building Solutions Asia Pacific and Global Products reportable segments became part of the Building Solutions EMEA/LA reportable segment. Historical information has been re-cast to present the comparative periods on a consistent basis. This change was not material to the segment presentation or the allocation of goodwill.

The changes in the carrying amount of goodwill in each of the Company’s reportable segments were as follows (in millions):


	September 30, 2020		Business Acquisitions		Business Divestitures		Impairments		Currency Translation and Other		September 30, 2021
Building Solutions North America	$	9,160	$	21	$	—	$	—	$	34	$	9,215
Building Solutions EMEA/LA	1,987		35		—		—		19		2,041
Building Solutions Asia Pacific	1,223		—		(7)		—		21		1,237
Global Products	5,562		244		—		—		36		5,842
Total	$	17,932	$	300	$	(7)	$	—	$	110	$	18,335

	September 30, 2021		Business Acquisitions		Business Divestitures (1)		Impairments		Currency Translation and Other		September 30, 2022
Building Solutions North America	$	9,215	$	37	$	—	$	(235)	$	(46)	$	8,971
Building Solutions EMEA/LA	2,041		78		(98)		—		(296)		1,725
Building Solutions Asia Pacific	1,237		44		(29)		—		(136)		1,116
Global Products	5,842		60		—		(75)		(311)		5,516
Total	$	18,335	$	219	$	(127)	$	(310)	$	(789)	$	17,328

(1) Business divestitures include $93 million and $29 million of goodwill within the Building Solutions EMEA/LA and Building Solutions Asia Pacific reportable segments, respectively, transferred to noncurrent assets held for sale on the consolidated statements of financial position.

As of September 30, 2022, the accumulated impairment loss totaled $781 million, of which $659 million related to the Building Solutions North America segment, $75 million related to the Global Products segment and $47 million related to the Building Solutions EMEA/LA segment.

As of September 30, 2021 and 2020, the accumulated impairment loss totaled $471 million, of which $424 million related to the Building Solutions North America segment and $47 million related to the Building Solutions EMEA/LA segment.

The Company reviews goodwill for impairment annually as of July 31 or more frequently if events or changes in circumstances indicate the asset might be impaired. During its fiscal 2022 annual impairment test, the Company determined that its Silent-Aire reporting unit's goodwill was impaired. As a result, the Company recorded a non-cash impairment charge of $75 million within restructuring and impairment costs in the consolidated statements of income in the fourth quarter of fiscal 2022, which was determined by comparing the carrying amount of the reporting unit to its fair value. The Silent-Aire reporting unit has a remaining goodwill balance of $183 million at September 30, 2022. The Company used a discounted cash flow model to estimate the fair value of the reporting unit. The primary assumptions used in the model were management's internal projections of future cash flows, the weighted-average cost of capital and long-term growth rates, which are classified as Level 3 inputs within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement." Although the Company's cash flow forecasts are based on assumptions that are considered reasonable by management and consistent with the plans and estimates management is using to operate the underlying business, there was significant judgment in determining the expected future cash flows attributable to the Silent-Aire reporting unit. Other than the Silent-Aire reporting unit that is recorded at fair value, no other reporting unit was determined to be at risk of failing the goodwill impairment test.

In the second quarter of fiscal 2022, the Company concluded it had a triggering event requiring assessment of goodwill impairment for its North America Retail reporting unit in conjunction with classifying its Global Retail business as held for sale. Refer to Note 3, "Discontinued Operations & Assets and Liabilities Held for Sale," of the notes to the consolidated financial statements for further disclosure related to the Global Retail assets held for sale. As a result, the Company recorded a non-cash impairment charge of $235 million within restructuring and impairment costs in the consolidated statements of

income in the second quarter of fiscal 2022. The North America Retail reporting unit has no remaining goodwill balance as of September 30, 2022. The Company used the market approach to estimate the fair value of the reporting unit based on the relative estimated sales proceeds for the planned disposal of the Global Retail business attributable to the North America Retail reporting unit. The inputs utilized in the analysis are classified as Level 3 inputs within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement."

There were no other triggering events requiring that an impairment assessment be conducted in fiscal 2022.

There were no goodwill impairments resulting from the fiscal 2021 and the fiscal 2020 annual impairment test and no reporting unit was determined to be at risk of failing the goodwill impairment test as of September 30, 2021.

During fiscal 2020, the Company considered the deterioration in general economic and market conditions due to the COVID-19 pandemic and its impact on each of the Company’s reporting units’ performance. Due to declines in cash flow projections of the North America Retail reporting unit in the third quarter of fiscal 2020 as a result of the COVID-19 pandemic, the Company concluded a triggering event occurred requiring assessment of impairment for its North America Retail reporting unit. As a result, the Company recorded a non-cash impairment charge of $424 million within restructuring and impairment costs in the consolidated statements of income in the third quarter of fiscal 2020. The North America Retail reporting unit had a remaining goodwill balance of $235 million at September 30, 2021. The Company used a discounted cash flow model to estimate the fair value of the reporting unit. The primary assumptions used in the model were management's internal projections of future cash flows, the weighted-average cost of capital and long-term growth rates, which are classified as Level 3 inputs within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement."

The Company’s other intangible assets, primarily from business acquisitions, consisted of (in millions):


	September 30,
	2022						2021
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Definite-lived intangible assets
Technology	$	1,353	$	(658)	$	695	$	1,464	$	(629)	$	835
Customer relationships	2,742		(1,254)		1,488		3,097		(1,191)		1,906
Miscellaneous	756		(386)		370		750		(354)		396
	4,851		(2,298)		2,553		5,311		(2,174)		3,137
Indefinite-lived intangible assets
Trademarks/tradenames	2,088		—		2,088		2,332		—		2,332
Miscellaneous	—		—		—		80		—		80
	2,088		—		2,088		2,412		—		2,412
Total intangible assets	$	6,939	$	(2,298)	$	4,641	$	7,723	$	(2,174)	$	5,549

The Company reviews indefinite-lived intangible assets for impairment during the fourth fiscal quarter or more frequently if events or changes in circumstances indicate the asset might be impaired.

There were no indefinite-lived intangible asset impairments resulting from the fiscal 2022, 2021 and 2020 annual impairment tests. However, it is possible that future changes in circumstances would require the Company to record non-cash impairment charges. For fiscal 2022, the estimated fair values of all indefinite-lived intangibles substantially exceeded their carrying values, with the exception of the indefinite-lived trademarks related to the Company's Asia Pacific subscriber business. The estimated fair value for the Asia Pacific indefinite-lived trademark was consistent with its carrying value of $54 million.

During the second and third quarters of fiscal 2020, the Company determined that it had a triggering event at each reporting period end requiring assessment of impairment for certain of its indefinite-lived intangible assets due to declines in revenue directly attributable to the COVID-19 pandemic. As a result, the Company recorded an impairment charge of $62 million related primarily to the Company's retail business indefinite-lived intangible assets within restructuring and impairment costs in the consolidated statements of income in the second quarter of fiscal 2020. No further impairment was required to be recorded in the third quarter of fiscal 2020 as a result of the completed impairment assessment.

Amortization of other intangible assets included within continuing operations for the years ended September 30, 2022, 2021 and 2020 was $427 million, $435 million and $386 million, respectively.

The following table summarizes the expected amortization of definite-lived intangible assets, excluding the impact of future acquisitions, by year (in millions):


2023	$	414
2024	406
2025	382
2026	317
2027	282