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GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended
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Mar. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS As previously discussed in Note 2 – Acquisition of Business, in May 2021 the Company increased its investment in DECIEM, which resulted in the inclusion of additional goodwill of $1,296 million, amortizable intangible assets (customer lists) of $701 million with amortization periods of 7 years to 14 years, and non-amortizable intangible assets (trademarks) of $1,216 million. Goodwill associated with the acquisition is primarily attributable to the future revenue growth opportunities associated with sales growth in the skin care category, as well as the value associated with DECIEM's assembled workforce. As such, the goodwill has been allocated to the Company’s skin care product category. The goodwill recorded in connection with this acquisition is not deductible for tax purposes. Goodwill The following table presents goodwill by product category and the related change in the carrying amount:
(In millions) |  | Skin Care |  | Makeup |  | Fragrance |  | Hair Care |  | Total
Balance as of June 30, 2021 |  |  |  |  |  |  |  |  |  |
Goodwill |  | $ | 1,786 |  |  | $ | 1,214 |  |  | $ | 262 |  |  | $ | 355 |  |  | $ | 3,617 |
Accumulated impairments |  | (141) |  |  | (830) |  |  | (30) |  |  | — |  |  | (1,001) |
|  | 1,645 |  |  | 384 |  |  | 232 |  |  | 355 |  |  | 2,616 |
Goodwill measurement period adjustment |  | 13 |  |  | — |  |  | — |  |  | — |  |  | 13 |
Translation adjustments, goodwill |  | (34) |  |  | — |  |  | (6) |  |  | — |  |  | (40) |
Translation adjustments, accumulated impairments |  | 2 |  |  | — |  |  | — |  |  | — |  |  | 2 |
|  | (19) |  |  | — |  |  | (6) |  |  | — |  |  | (25) |
Balance as of March 31, 2022 |  |  |  |  |  |  |  |  |  |
Goodwill |  | 1,765 |  |  | 1,214 |  |  | 256 |  |  | 355 |  |  | 3,590 |
Accumulated impairments |  | (139) |  |  | (830) |  |  | (30) |  |  | — |  |  | (999) |
|  | $ | 1,626 |  |  | $ | 384 |  |  | $ | 226 |  |  | $ | 355 |  |  | $ | 2,591 |
Other Intangible Assets Other intangible assets consist of the following:
|  | March 31, 2022 |  | June 30, 2021
(In millions) |  | Gross Carrying Value |  | Accumulated Amortization |  | Total Net Book Value |  | Gross Carrying Value |  | Accumulated Amortization |  | Total Net Book Value
Amortizable intangible assets: |  |  |  |  |  |  |  |  |  |  |  |
Customer lists and other |  | $ | 2,208 |  |  | $ | 660 |  |  | $ | 1,548 |  |  | $ | 2,273 |  |  | $ | 544 |  |  | $ | 1,729 |
License agreements |  | 43 |  |  | 43 |  |  | — |  |  | 43 |  |  | 43 |  |  | — |
|  | $ | 2,251 |  |  | $ | 703 |  |  | 1,548 |  |  | $ | 2,316 |  |  | $ | 587 |  |  | 1,729 |
Non-amortizable intangible assets: |  |  |  |  |  |  |  |  |  |  |  |
Trademarks and other |  |  |  |  |  | 2,090 |  |  |  |  |  |  | 2,366 |
Total intangible assets |  |  |  |  |  | $ | 3,638 |  |  |  |  |  |  | $ | 4,095 |
The aggregate amortization expense related to amortizable intangible assets was $38 million and $25 million for the three months ended March 31, 2022 and 2021, respectively, and $122 million and $77 million for the nine months ended March 31, 2022 and 2021, respectively. The estimated aggregate amortization expense for the remainder of fiscal 2022 and for each of the next four fiscal years is as follows:
|  | Fiscal
(In millions) |  | 2022 |  | 2023 |  | 2024 |  | 2025 |  | 2026
Estimated aggregate amortization expense |  | $ | 39 |  |  | $ | 155 |  |  | $ | 154 |  |  | $ | 154 |  |  | $ | 154 |
Impairment Testing During the Nine Months Ended March 31, 2022 During the fiscal 2022 third quarter, given the lower-than-expected results from international expansion to areas that continue to be impacted by COVID-19, the Company made revisions to the internal forecasts relating to its GLAMGLOW reporting unit. The Company concluded that the changes in circumstances in the reporting unit triggered the need for an interim impairment review of its trademark intangible asset. As of March 31, 2022, the remaining carrying value of the trademark intangible asset was not recoverable and the Company recorded an impairment charge of $11 million reducing the carrying value to zero. During the fiscal 2022 third quarter, given the lower-than-expected growth within key geographic regions and channels for Dr.Jart+ that continue to be impacted by the spread of COVID-19 variants and resurgence in cases and the potential future impacts relating to the uncertainty of the duration and severity of COVID-19 impacting the financial performance of the brand, the lower than expected growth in key retail channels for DECIEM, and the lower than expected results from international expansion to areas that continue to be impacted by COVID-19 for Too Faced, the Company made revisions to the internal forecasts relating to its Dr. Jart+, DECIEM and Too Faced reporting units. The Company concluded that the changes in circumstances in the reporting units triggered the need for interim impairment reviews of their trademarks and goodwill. These changes in circumstances were also an indicator that the carrying amounts of Dr.Jart+’s, DECIEM’s and Too Faced’s long-lived assets, including customer lists, may not be recoverable. Accordingly, the Company performed interim impairment tests for the trademarks and a recoverability test for the long-lived assets as of February 28, 2022. The Company concluded that the carrying amounts of the long-lived assets were recoverable. For the Dr.Jart+ reporting unit, the Company also concluded that the carrying value of the trademark intangible asset exceeded its estimated fair value, which was determined utilizing the relief-from-royalty method to determine discounted projected future cash flows, and recorded an impairment charge. For the Too Faced and DECIEM reporting units, as the carrying values of the trademarks did not exceed their estimated fair values, which were determined utilizing the relief-from-royalty method to determine discounted projected future cash flows, the Company did not record impairment charges. As of March 31, 2022, the estimated fair values of Too Faced’s and DECIEM's trademarks exceeded their carrying values by 13% and 3%, respectively. For the Too Faced and DECIEM trademark intangible assets, if all other assumptions are held constant, an increase of 100 basis points and 50 basis points, respectively, in the weighted average cost of capital would result in an impairment charge. After adjusting the carrying values of the trademarks, the Company completed interim quantitative impairment tests for goodwill. As the estimated fair value of the Dr.Jart+, DECIEM and Too Faced reporting units were in excess of their carrying values, the Company concluded that the carrying amounts of the goodwill were recoverable and did not record a goodwill impairment charge related to these reporting units. The fair value of these reporting units were based upon an equal weighting of the income and market approaches, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows, as well as valuation multiples derived from comparable publicly traded companies that are applied to operating performance of the reporting units. The significant assumptions used in these approaches include revenue growth rates and profit margins, terminal values, weighted average cost of capital used to discount future cash flows and royalty rates for trademarks. The most significant unobservable input used to estimate the fair value of the Dr. Jart+ trademark intangible asset was the weighted-average cost of capital, which was 10.5%. A summary of the impairment charges for the three and nine months ended March 31, 2022 and the remaining trademark and goodwill carrying values as of March 31, 2022, for each reporting unit, are as follows:
(In millions) |  |  |  | Impairment Charge |  | Carrying Value
Reporting Unit: |  | Geographic Region |  | Trademarks |  | Goodwill |  | Trademarks |  | Goodwill
GLAMGLOW |  | The Americas |  | $ | 11 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Dr. Jart+ |  | Asia/Pacific |  | 205 |  |  | — |  |  | 486 |  |  | 332 |
Total |  |  |  | $ | 216 |  |  | $ | — |  |  | $ | 486 |  |  | $ | 332 |
The impairment charges for the three and nine months ended March 31, 2022 were reflected in the skin care product category. Impairment Testing During the Nine Months Ended March 31, 2021 During November 2020, given the actual and the estimate of the potential future impacts relating to the uncertainty of the duration and severity of COVID-19 impacting the Company and lower than expected results from geographic expansion, the Company made further revisions to the internal forecasts relating to its GLAMGLOW reporting unit. The Company concluded that the changes in circumstances in this reporting unit triggered the need for an interim impairment review of its trademark and goodwill. These changes in circumstances were also an indicator that the carrying amounts of GLAMGLOW's long-lived assets, including customer lists, may not be recoverable. Accordingly, the Company performed an interim impairment test for the trademark and a recoverability test for the long-lived assets as of November 30, 2020. The Company concluded that the carrying value of the trademark for GLAMGLOW exceeded its estimated fair value, which was determined utilizing the relief-from-royalty method to determine discounted projected future cash flows, and recorded an impairment charge of $21 million. In addition, the Company concluded that the carrying value of the GLAMGLOW customer lists intangible asset was fully impaired and recorded an impairment charge of $6 million. The fair value of all other long-lived assets of GLAMGLOW exceeded their carrying values and were not impaired as of November 30, 2020. After adjusting the carrying values of the trademark and customer lists intangible assets, the Company completed an interim quantitative impairment test for goodwill and recorded a goodwill impairment charge of $54 million, reducing the carrying value of goodwill for the GLAMGLOW reporting unit to zero. The fair value of the GLAMGLOW reporting unit was based upon an equal weighting of the income and market approaches, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows, as well as valuation multiples derived from comparable publicly traded companies that are applied to operating performance of the reporting unit. The impairment charges for the nine months ended March 31, 2021 were reflected in the skin care product category and in the Americas region. As of March 31, 2021, the remaining carrying value of the trademark related to the GLAMGLOW reporting unit was $36 million.

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