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GOODWILL | 12 Months Ended
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Jan. 01, 2021
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL | NOTE 10: GOODWILL As discussed in Note 25: Business Segments in these Notes, after the completion of the L3Harris Merger, we adjusted our segment reporting to reflect our new organizational structure effective June 29, 2019. Immediately before and after our goodwill assignments, we completed an assessment of any potential goodwill impairment under our former and new segment reporting structure and determined that no impairment existed. The assignment of goodwill by business segment, and changes in the carrying amount of goodwill, by business segment, for fiscal 2020 and the two quarters ended January 3, 2020 were as follows:
(In millions) | Integrated Mission Systems |  | Space and Airborne Systems |  | Communication Systems |  | Aviation Systems |  |  |  | Total
Balance at June 28, 2019 | $ | 64 |  |  | $ | 3,737 |  |  | $ | 927 |  |  | $ | 612 |  |  |  |  | $ | 5,340 |
Goodwill acquired | 5,704 |  |  | 1,390 |  |  | 3,316 |  |  | 4,239 |  |  |  |  | 14,649 |
Currency translation adjustments | 1 |  |  | 4 |  |  | — |  |  | 7 |  |  |  |  | 12 |
Balance at January 3, 2020 | 5,768 |  |  | 5,131 |  |  | 4,243 |  |  | 4,859 |  |  |  |  | 20,001 |
Goodwill decrease from divestitures(1) | — |  |  | (2) |  |  | (9) |  |  | (530) |  |  |  |  | (541) |
Impairment of goodwill | — |  |  | (5) |  |  | — |  |  | (475) |  |  |  |  | (480) |
Currency translation adjustments | (10) |  |  | (4) |  |  | 1 |  |  | (1) |  |  |  |  | (14) |
Other (including adjustments to previously estimated fair value of assets acquired and liabilities assumed)(2) | 741 |  |  | 112 |  |  | (82) |  |  | (861) |  |  |  |  | (90) |
Balance at January 1, 2021 | $ | 6,499 |  |  | $ | 5,232 |  |  | $ | 4,153 |  |  | $ | 2,992 |  |  |  |  | $ | 18,876 |
_______________ (1)During fiscal 2020, we completed the divestiture of three businesses (airport security and automation business, Applied Kilovolts and Analytical Instrumentation business and EOTech business) and derecognized $541 million of goodwill as part of determining the gain or loss on these divestitures. See Note 3: Business Divestitures and Asset Sales in these Notes for additional information. (2)See Note 5: Business Combination in these Notes for additional information regarding adjustments to previously estimated fair values of assets acquired and liabilities assumed. Commercial Aviation Solutions Impairments. Indications of potential impairment of goodwill related to our Commercial Aviation Solutions reporting unit (which is part of our Aviation Systems segment) were present at April 3, 2020 due to COVID and its impact on global air traffic and customer operations, resulting in a decrease in fiscal 2020 outlook for the reporting unit, which we considered to be a triggering event requiring an interim impairment test. Consequently, in connection with the preparation of our financial statements for the quarter ended April 3, 2020, we performed a quantitative impairment test. To test for potential impairment of goodwill related to our Commercial Aviation Solutions reporting unit, we prepared an estimate of the fair value of the reporting unit based on a combination of market-based valuation techniques, utilizing quoted market prices and comparable publicly reported transactions, and projected discounted cash flows. Given the level of uncertainty in the outlook for the commercial aviation industry caused by the impact of COVID on global air traffic, our methodology for determining the fair value of the reporting unit placed the greatest weight on the expected fair value technique, and was dependent on our best estimates of future sales, operating costs and balance sheet metrics under a range of scenarios for future economic conditions. We assigned a probability to each scenario to calculate a set of probability-weighted projected cash flows, and an appropriate discount rate reflecting the risk in the projected cash flows was used to discount the expected cash flows to present value. As adverse global economic and market conditions attributable to COVID, including projected declines and subsequent recovery in commercial air traffic and original equipment manufacturer production volumes, continued to develop during fiscal 2020, we continued to monitor for facts and circumstances that could negatively impact key valuation assumptions in determining the fair value of our Commercial Aviation Solutions reporting unit, including recent valuations, expectations regarding the timing of a return to pre-COVID commercial flight activity and the associated level of uncertainty, long-term revenue and profitability projections, discount rates and general industry, market and macroeconomic conditions. As a result, we determined indications of further impairment of assets related to our Commercial Aviation Solutions reporting unit existed as of July 3, 2020 and again as of early December 2020. As a result of these impairment tests, we concluded that goodwill and other assets related to our Commercial Aviation Solutions reporting unit were impaired as of April 3, 2020, July 3, 2020 and January 1, 2021, and we recorded the following non-cash impairment charges: •$461 million (including $34 million attributable to noncontrolling interests) for impairment of goodwill during fiscal 2020, including $111 million recognized in the fourth quarter of fiscal 2020; and •$257 million for impairment of long-lived assets recognized during the fourth quarter of fiscal 2020, including $113 million for identifiable intangibles assets, $103 million for property, plant and equipment, $31 million for ROU assets and $10 million for marketable software. These charges are included in the “Impairment of goodwill and other assets” line item in our Consolidated Statement of Income for fiscal 2020 and are primarily not deductible for tax purposes. VSE Disposal Group Impairment. During the quarter ended July 3, 2020, we determined the criteria to be classified as held for sale were met with respect to the VSE disposal group within our Aviation Systems segment and assigned $14 million of goodwill to the VSE disposal group on a relative fair value basis. In connection with the preparation of our financial statements for the quarter ended July 3, 2020, we concluded that goodwill related to the VSE disposal group was impaired and recorded a non-cash impairment charge $14 million, which is included in the “Impairment of goodwill and other assets” line item in our Consolidated Statement of Income for fiscal 2020.

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