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Condensed Consolidated Financial Statement Details | 9 Months Ended
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Sep. 30, 2022
Condensed Consolidated Financial Statement Details [Abstract] |
Condensed Consolidated Financial Statement Details | Condensed Consolidated Financial Statement Details Cash and Cash Equivalents The Company records restricted cash in captions other than Cash and cash equivalents in the consolidated balance sheets. The reconciliation between Cash and cash equivalents in the consolidated balance sheets and Cash, cash equivalents and restricted cash per the consolidated statements of cash flows is as follows (in millions):
| September 30, 2022 |  | December 31, 2021
Cash and cash equivalents on the consolidated balance sheets | $ | 1,932 |  |  | $ | 2,010 |
Merchant float (in Settlement assets) | 2,309 |  |  | 2,273 |
Total Cash and cash equivalents and restricted cash per the consolidated statements of cash flows | $ | 4,241 |  |  | $ | 4,283 |
Settlement Assets and Payables The principal components of the Company's settlement assets and payables on the consolidated balance sheets are as follows (in millions):
| September 30, 2022 |  | December 31, 2021
Settlement assets |  |  |
Settlement deposits | $ | 462 |  |  | $ | 530 |
Merchant float | 2,309 |  |  | 2,273 |
Settlement receivables | 1,588 |  |  | 1,217 |
Total Settlement assets | $ | 4,359 |  |  | $ | 4,020 |
Settlement payables | $ | 5,076 |  |  | $ | 5,295 |
Allowance for Credit Losses The Company monitors trade receivable balances and contract assets as well as other receivables and estimates the allowance for lifetime expected credit losses. Estimates of expected credit losses are based on historical collection experience and other factors, including those related to current market conditions and events such as higher inflation and interest rates and slower economic growth. The allowance for credit losses is separate from the chargeback liability described in Note 8. While the COVID-19 pandemic did not result in a significant increase in the Company's expected credit loss allowance recorded as of September 30, 2022, and December 31, 2021, it is reasonably possible that future developments related to the economic impact of the COVID-19 pandemic could have a material impact on management's estimates. Property and Equipment, Intangible Assets and Software The following table provides details of Property and equipment, Intangible assets and Software as of September 30, 2022, and December 31, 2021 (in millions):
| September 30, 2022 |  | December 31, 2021
| Cost |  | Accumulated depreciation and amortization |  | Net |  | Cost |  | Accumulated depreciation and amortization |  | Net
Intangible assets | $ | 17,823 |  |  | $ | 8,623 |  |  | $ | 9,200 |  |  | $ | 18,919 |  |  | $ | 7,380 |  |  | $ | 11,539 |
Property and equipment | $ | 2,311 |  |  | $ | 1,472 |  |  | $ | 839 |  |  | $ | 2,520 |  |  | $ | 1,571 |  |  | $ | 949 |
Software | $ | 6,402 |  |  | $ | 3,271 |  |  | $ | 3,131 |  |  | $ | 6,195 |  |  | $ | 2,896 |  |  | $ | 3,299 |
As of September 30, 2022, Intangible assets, net of amortization, includes $8,919 million of customer relationships and $281 million of trademarks and other intangible assets. Amortization expense with respect to Intangible assets was $534 million and $595 million for the three months and $1,636 million and $1,789 million for the nine months ended September 30, 2022 and 2021, respectively. Depreciation expense for property and equipment was $56 million and $62 million for the three months and $192 million and $195 million for the nine months ended September 30, 2022 and 2021, respectively. Amortization expense with respect to software was $261 million and $303 million for the three months and $822 million and $758 million for the nine months ended September 30, 2022 and 2021, respectively. During the three and nine months ended September 30, 2022 and 2021, the Company recorded $31 million and $83 million and $140 million and $83 million, respectively, of incremental software amortization expense resulting from the Company's platform modernization. Platform modernization includes sunsetting certain technology platforms, which resulted in shortened estimated useful lives and accelerated amortization methods primarily impacting the associated assets over approximately three years, beginning in the third quarter of 2021. Impairments For the three months ended September 30, 2022, the $17 million of impairments were primarily related to certain software rendered obsolete by platform modernization. For the nine months ended September 30, 2022, the Company also recorded $58 million of impairments primarily related to real estate-related assets as a result of office space reductions and $29 million of impairments primarily related to a non-strategic business. During the three and nine months ended September 30, 2021, the Company recorded $202 million of asset impairments for certain software and deferred contract cost assets resulting from the Company's platform modernization initiatives. Goodwill Changes in goodwill during the three months ended September 30, 2022, are summarized below (in millions).
|  |  |  |  | Capital |  | Corporate |  |
| Banking |  | Merchant |  | Market |  | And |  |
| Solutions |  | Solutions |  | Solutions |  | Other |  | Total
Balance, December 31, 2021 | $ | 12,244 |  |  | $ | 36,403 |  |  | $ | 4,663 |  |  | $ | 20 |  |  | $ | 53,330 |
Foreign currency adjustments | (66) |  |  | (2,108) |  |  | (153) |  |  | — |  |  | (2,327) |
Goodwill attributable to acquisitions | — |  |  | 11 |  |  | — |  |  | — |  |  | 11 |
Balance, September 30, 2022 | $ | 12,178 |  |  | $ | 34,306 |  |  | $ | 4,510 |  |  | $ | 20 |  |  | $ | 51,014 |
We assess goodwill for impairment on an annual basis during the fourth quarter or more frequently if circumstances indicate potential impairment. We evaluated if events and circumstances as of September 30, 2022, indicated potential impairment of our reporting units. We performed a qualitative assessment by examining factors most likely to affect our reporting units' fair values and considered the impact to our business from the COVID-19 pandemic and macroeconomic conditions. The factors examined involve significant use of management judgment and included, among others, (1) forecast revenue, growth rates, operating margins, and capital expenditures used to calculate estimated future cash flows, (2) future economic and market conditions and (3) FIS' market capitalization. Based on our interim impairment assessment as of September 30, 2022, we concluded that it remained more likely than not that the fair value continues to exceed the carrying amount for each of our reporting units; therefore, goodwill was not impaired. However, it is reasonably possible that macroeconomic conditions, including rates of economic growth, inflation and interest, and foreign currency movements, in addition to any further economic impact of the COVID-19 pandemic on our Merchant Solutions business, could have a material impact on one or more of the estimates and assumptions used to evaluate goodwill impairment and could result in future goodwill impairment. Visa Europe and Contingent Value Rights As part of the Worldpay acquisition, the Company acquired certain assets and liabilities related to the June 2016 Worldpay Group plc (Legacy Worldpay) disposal of its ownership interest in Visa Europe to Visa Inc. As part of the disposal, Legacy Worldpay received proceeds from Visa Inc. in the form of cash ("cash consideration") and convertible preferred stock ("preferred stock"), the value of which may be reduced by losses incurred relating to ongoing interchange-related litigation involving Visa Europe. Also in connection with the disposal and pursuant to the terms of an amendment executed on September 17, 2020, the Company will pay the former Legacy Worldpay owners 90% of the net-of-tax proceeds from the disposal, known as contingent value rights, which is recorded as a liability ("CVR liability") on the consolidated balance sheets. In the third quarter of 2022, Visa Inc. released a portion of the aforementioned preferred stock which was then converted into common stock. The Company sold the common stock for $269 million and paid to the former Legacy Worldpay owners 90% of the net-of tax proceeds and net-of-tax dividends received since the previous conversion, totaling $186 million paid in the third quarter of 2022 and $14 million subsequently paid in the fourth quarter of 2022. The sale of stock and related third-quarter payment to the former Legacy Worldpay owners were recorded as a reduction of the CVR-related assets and CVR liability, respectively, as of September 30, 2022, and are reflected as Other investing activities, net and Other financing activities, net, respectively on the consolidated statement of cash flows for the nine months ended September 30, 2022. The Company has elected the fair value option under ASC 825, Financial Instruments ("ASC 825"), for measuring its preferred stock asset and CVR liability. The fair value of the preferred stock was $39 million and $197 million at September 30, 2022 and December 31, 2021, respectively, recorded in Other noncurrent assets on the consolidated balance sheets. The fair value of the CVR liability was $341 million at September 30, 2022, with $14 million recorded as Accounts payable, accrued and other liabilities related to amounts owed to the former Legacy Worldpay owners at September 30, 2022, in connection with the preferred stock that was released, converted and sold in the third quarter and $327 million recorded as Other noncurrent liabilities for the remaining preferred stock and cash consideration component. The fair value of the CVR liability was $478 million at December 31, 2021, recorded in Other noncurrent liabilities on the consolidated balance sheets. Pursuant to ASC 825, the Company remeasures the fair value of the preferred stock and CVR liability each reporting period. The net change in fair value was $14 million and $(3) million for the three months ended and $63 million and $12 million for the nine months ended September 30, 2022 and 2021, respectively, recorded in Other income (expense), net on the consolidated statements of earnings (loss). Equity Security Investments The Company holds various equity securities without readily determinable fair values that primarily represent strategic investments made through our FIS Impact Ventures program as well as investments obtained through acquisitions. Such investments totaled $463 million and $358 million at September 30, 2022, and December 31, 2021, respectively, and are included within Other noncurrent assets on the consolidated balance sheets. The Company accounts for these investments at cost, less impairment, and adjusts the carrying values for observable price changes from orderly transactions for identical or similar investments of the same issuer. The Company records gains and losses on these investments, realized and unrealized, as Other income (expense), net on the consolidated statements of earnings (loss) and recorded net gains of $5 million and $126 million for the three months and $52 million and $214 million for the nine months ended September 30, 2022 and 2021, respectively, related to these investments.

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