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Condensed Consolidated Financial Statement Details | 6 Months Ended
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Jun. 30, 2023
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):
| June 30, 2023 |  | December 31, 2022
Cash and cash equivalents on the consolidated balance sheets | $ | 1,982 |  |  | $ | 2,188 |
Merchant float (in Settlement assets) | 2,379 |  |  | 2,625 |
Total Cash and cash equivalents and restricted cash per the consolidated statements of cash flows | $ | 4,361 |  |  | $ | 4,813 |
Settlement Assets The principal components of the Company's settlement assets on the consolidated balance sheets are as follows (in millions):
| June 30, 2023 |  | December 31, 2022
Settlement assets |  |  |
Settlement deposits | $ | 443 |  |  | $ | 492 |
Merchant float | 2,379 |  |  | 2,625 |
Settlement receivables | 1,278 |  |  | 2,738 |
Total Settlement assets | $ | 4,100 |  |  | $ | 5,855 |
Intangible Assets, Software and Property and Equipment The following table provides details of Intangible assets, Software and Property and equipment as of June 30, 2023, and December 31, 2022 (in millions):
| June 30, 2023 |  | December 31, 2022
| Cost |  | Accumulated depreciation and amortization |  | Net |  | Cost |  | Accumulated depreciation and amortization |  | Net
Intangible assets | $ | 18,464 |  |  | $ | 10,380 |  |  | $ | 8,084 |  |  | $ | 18,260 |  |  | $ | 9,304 |  |  | $ | 8,956 |
Software | $ | 6,827 |  |  | $ | 3,559 |  |  | $ | 3,268 |  |  | $ | 6,607 |  |  | $ | 3,369 |  |  | $ | 3,238 |
Property and equipment | $ | 2,436 |  |  | $ | 1,607 |  |  | $ | 829 |  |  | $ | 2,381 |  |  | $ | 1,519 |  |  | $ | 862 |
As of June 30, 2023, Intangible assets, net of amortization, includes $7,894 million of customer relationships and $190 million of trademarks and other intangible assets. Amortization expense with respect to Intangible assets was $499 million and $545 million for the three months and $996 million and $1,102 million for the six months ended June 30, 2023 and 2022, respectively. Depreciation expense for property and equipment was $56 million and $64 million for the three months and $114 million and $137 million for the six months ended June 30, 2023 and 2022, respectively. Amortization expense with respect to software was $246 million and $274 million for the three months and $497 million and $561 million for the six months ended June 30, 2023 and 2022, respectively. The Company recorded $11 million and $47 million, during the three months and $27 million and $109 million during the six months ended June 30, 2023 and 2022, 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. For the three and six months ended June 30, 2022, the Company recorded $29 million of impairment primarily related to a non-strategic business. For the six months ended June 30, 2022, the Company also recorded $58 million of impairments primarily related to real estate-related assets as a result of office space reductions. Goodwill Changes in goodwill during the six months ended June 30, 2023, are summarized below (in millions). Prior-period amounts have been reclassified to conform to the new reportable segment presentation as discussed in Note 11.
|  |  |  |  | Capital |  | Corporate |  |
| Banking |  | Merchant |  | Market |  | And |  |
| Solutions |  | Solutions |  | Solutions |  | Other |  | Total
Balance, December 31, 2022 | $ | 12,536 |  |  | $ | 17,460 |  |  | $ | 4,260 |  |  | $ | 20 |  |  | $ | 34,276 |
Asset impairments | — |  |  | (6,839) |  |  | — |  |  | — |  |  | (6,839) |
Foreign currency adjustments | 9 |  |  | 206 |  |  | 29 |  |  | — |  |  | 244 |
Balance, June 30, 2023 | $ | 12,545 |  |  | $ | 10,827 |  |  | $ | 4,289 |  |  | $ | 20 |  |  | $ | 27,681 |
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 June 30, 2023, indicated potential impairment of our reporting units. For our Banking and Capital Markets reporting units, we performed a qualitative assessment by examining factors most likely to affect our reporting units' fair values, including the impact of recent U.S. bank failures. The factors examined involve 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 June 30, 2023, we concluded that it remained more likely than not that the fair value continues to exceed the carrying amount for each of these reporting units; therefore, goodwill was not impaired. Given the substantial excess of fair value over carrying amounts, we believe the likelihood of obtaining materially different results based on a change of assumptions to be low. For our Merchant reporting unit, events and circumstances during the three months ended June 30, 2023, indicated potential goodwill impairment. As recently as December 31, 2022, the Merchant reporting unit’s carrying value was equal to its estimated fair value, creating a possibility of future goodwill impairment as a result of any further decrease in its estimated fair value. Also, as of June 30, 2023, the Company was in negotiations to sell, and expected that it was more likely than not that it would sell, a majority stake in the reporting unit. Accordingly, we performed a quantitative goodwill impairment assessment as of June 30, 2023. To estimate the fair value of the reporting unit, we used a market approach based on the price at which the Company subsequently agreed to sell a majority interest in the Worldpay Merchant Solutions business as further discussed in Note 2 to the consolidated financial statements. Based on this price, inclusive of estimated selling price adjustments and fair value of contingent consideration, the estimated fair value of the reporting unit was less than its carrying value, and we recorded a $6.8 billion impairment charge in the second quarter of 2023. As a result, the Merchant reporting unit's carrying value as of June 30, 2023, is equal to its fair value. The Merchant disposal unit will be evaluated under an asset-held-for-sale accounting model beginning in the third quarter of 2023. Under an asset-held-for-sale model, the disposal unit will be valued at fair value less cost to sell, and the value could be affected by changes in estimated selling price adjustments or fair value of contingent consideration. Additionally, the carrying value will be adjusted to include cumulative translations adjustments. These factors could result in further impairment. The total carrying amount of goodwill as of June 30, 2023, and December 31, 2022, is net of accumulated impairment charges of $24.5 billion. $24.4 billion of this amount relates to Merchant Solutions stemming from a $6.8 billion impairment recorded in the second quarter of 2023 and $17.6 billion recorded during the fourth quarter of 2022. Additionally, $94 million relates to non-strategic businesses within Corporate and Other. 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. The preferred stock becomes convertible into Visa Inc. Class A common stock ("common stock") in stages as determined by Visa Inc. in accordance with the relevant transaction documents pertaining to the aforementioned disposal of the Visa Europe ownership interest. The preferred stock becomes fully convertible no later than 2028 (subject to a holdback to cover any pending claims). 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. 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 $80 million and $55 million at June 30, 2023, and December 31, 2022, respectively, recorded in Other noncurrent assets on the consolidated balance sheets. The fair value of the CVR liability was $361 million and $342 million at June 30, 2023, and December 31, 2022, respectively, 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 $9 million and $25 million for the three months and $6 million and $49 million for the six months ended June 30, 2023 and 2022, 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 by the Company as well as investments obtained through acquisitions. Such investments totaled $365 million and $393 million at June 30, 2023, and December 31, 2022, 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. These adjustments are generally considered Level 2-type fair value measurements. The Company records realized and unrealized gains and losses on these investments as well as impairment losses as Other income (expense), net on the consolidated statements of earnings (loss) and recorded net gains (losses) of $(32) million and $6 million for the three months and $(34) million and $47 million for the six months ended June 30, 2023 and 2022, respectively, related to these investments.

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