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GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended
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Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS 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, 2022 |  |  |  |  |  |  |  |  |  |
Goodwill |  | $ | 1,702 |  |  | $ | 1,116 |  |  | $ | 249 |  |  | $ | 353 |  |  | $ | 3,420 |
Accumulated impairments |  | (138) |  |  | (732) |  |  | (29) |  |  | — |  |  | (899) |
|  | 1,564 |  |  | 384 |  |  | 220 |  |  | 353 |  |  | 2,521 |
Translation and other adjustments, goodwill |  | (56) |  |  | — |  |  | 5 |  |  | — |  |  | (51) |
Translation and other adjustments, accumulated impairments |  | (1) |  |  | — |  |  | (1) |  |  | — |  |  | (2) |
|  | (57) |  |  | — |  |  | 4 |  |  | — |  |  | (53) |
Balance as of March 31, 2023 |  |  |  |  |  |  |  |  |  |
Goodwill |  | 1,646 |  |  | 1,116 |  |  | 254 |  |  | 353 |  |  | 3,369 |
Accumulated impairments |  | (139) |  |  | (732) |  |  | (30) |  |  | — |  |  | (901) |
|  | $ | 1,507 |  |  | $ | 384 |  |  | $ | 224 |  |  | $ | 353 |  |  | $ | 2,468 |
Other Intangible Assets Other intangible assets consist of the following:
|  | March 31, 2023 |  | June 30, 2022
(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, license agreements and other |  | $ | 2,036 |  |  | $ | 734 |  |  | $ | 1,302 |  |  | $ | 2,064 |  |  | $ | 628 |  |  | $ | 1,436 |
Non-amortizable intangible assets: |  |  |  |  |  |  |  |  |  |  |  |
Trademarks |  |  |  |  |  | 1,743 |  |  |  |  |  |  | 1,992 |
Total intangible assets |  |  |  |  |  | $ | 3,045 |  |  |  |  |  |  | $ | 3,428 |
The aggregate amortization expense related to amortizable intangible assets was $36 million and $38 million for the three months ended March 31, 2023 and 2022, respectively, and $109 million and $122 million for the nine months ended March 31, 2023 and 2022, respectively. The estimated aggregate amortization expense for the remainder of fiscal 2023 and for each of the next four fiscal years is as follows:
|  | Fiscal
(In millions) |  | 2023 |  | 2024 |  | 2025 |  | 2026 |  | 2027
Estimated aggregate amortization expense |  | $ | 38 |  |  | $ | 146 |  |  | $ | 146 |  |  | $ | 146 |  |  | $ | 129 |
Impairment Analysis During the Nine Months Ended March 31, 2023 During the fiscal 2023 second quarter, given the lower-than-expected results in the overall business, the Company made revisions to the internal forecasts relating to its Smashbox 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. The remaining carrying value of the trademark intangible asset was not recoverable and the Company recorded an impairment charge of $21 million reducing the carrying value to zero. During the fiscal 2023 second quarter, the Dr.Jart+ reporting unit experienced lower-than-expected growth within key geographic regions and channels that continue to be impacted by the spread of COVID-19 variants, 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 reporting unit. In addition, due to macro-economic factors, Dr.Jart+ has experienced lower-than-expected growth within key geographic regions. The Too Faced reporting unit experienced lower-than-expected results in key geographic regions and channels coupled with delays in future international expansion to areas that continue to be impacted by COVID-19. As a result, the Company made revisions to the internal forecasts relating to its Dr.Jart+ and Too Faced reporting units. Additionally, there were increases in the weighted average cost of capital for both reporting units as compared to the prior year annual goodwill and other indefinite-lived intangible asset impairment testing as of April 1, 2022. The Company concluded that the changes in circumstances in the reporting units, along with increases in the weighted average cost of capital, 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 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 November 30, 2022. The Company concluded that the carrying value of the trademark intangible assets exceeded their estimated fair values, which were determined utilizing the relief-from-royalty method to determine discounted projected future cash flows and recorded an impairment charge of $100 million for Dr.Jart+ and $86 million for Too Faced. The Company concluded that the carrying amounts of the long-lived assets were recoverable. 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+ 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 values 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 values of the Dr.Jart+ and Too Faced trademark intangible assets was the weighted-average cost of capital, which was 11% and 13%, respectively. A summary of the impairment charges for the three and nine months ended March 31, 2023 and the remaining trademark and goodwill carrying values as of March 31, 2023, for each reporting unit, are as follows:
|  |  |  | Impairment Charges |  | Carrying Value
(In millions) |  |  |  | Three Months Ended March 31, 2023 |  | Nine Months Ended March 31, 2023 |  | As of March 31, 2023
Reporting Unit |  | Geographic Region |  | Trademarks |  | Goodwill |  | Trademarks |  | Goodwill |  | Trademarks |  | Goodwill
Smashbox |  | The Americas |  | $ | — |  |  | $ | — |  |  | $ | 21 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Dr.Jart+ |  | Asia/Pacific |  | — |  |  | — |  |  | 100 |  |  | — |  |  | 330 |  |  | 310 |
Too Faced |  | The Americas |  | — |  |  | — |  |  | 86 |  |  | — |  |  | 186 |  |  | 13 |
Total |  |  |  | $ | — |  |  | $ | — |  |  | $ | 207 |  |  | $ | — |  |  | $ | 516 |  |  | $ | 323 |
The impairment charges for the nine months ended March 31, 2023 were reflected in the skin care product category for Dr.Jart+ and the makeup product category for Smashbox and Too Faced. Impairment Analysis 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 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+ 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 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 Charges |  | Carrying Value
|  |  |  | Three and Nine Months Ended March 31, 2022 |  | As of March 31, 2022
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.

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