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GOODWILL, INTANGIBLE ASSETS, NET, AND DIGITAL ASSETS HELD | 6 Months Ended
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Jun. 30, 2022
GOODWILL, INTANGIBLE ASSETS, NET, AND DIGITAL ASSETS HELD |
GOODWILL, INTANGIBLE ASSETS, NET, AND DIGITAL ASSETS HELD | 8. GOODWILL, INTANGIBLE ASSETS, NET, AND DIGITAL ASSETS HELD The following table presents the details of goodwill by segment (in millions):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | North American | ​ | Europe and | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Options |  | Equities |  | Asia Pacific |  | Global FX |  | Digital |  | Total
Balance as of December 31, 2021 | ​ | $ | 305.8 | ​ | $ | 1,876.9 | ​ | $ | 575.5 | ​ | $ | 267.2 | ​ | $ | — | ​ | $ | 3,025.4
Adjustment | ​ |  | — | ​ | ​ | — | ​ | ​ | 3.4 | ​ | ​ | — | ​ | ​ | — | ​ |  | 3.4
Additions | ​ | ​ | — | ​ | ​ | 132.4 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 460.1 | ​ | ​ | 592.5
Impairment | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (460.1) | ​ | ​ | (460.1)
Changes in foreign currency exchange rates | ​ |  | — | ​ |  | (0.5) | ​ |  | (28.7) | ​ |  | — | ​ |  | — | ​ |  | (29.2)
Balance as of June 30, 2022 | ​ | $ | 305.8 | ​ | $ | 2,008.8 | ​ | $ | 550.2 | ​ | $ | 267.2 | ​ | $ | — | ​ | $ | 3,132.0
​ Goodwill has been allocated to specific reporting units for purposes of impairment testing - Options, North American Equities, Europe and Asia Pacific, Global FX, and Digital. No goodwill has been allocated to Futures. Goodwill impairment testing is performed annually in the fiscal fourth quarter or more frequently if conditions exist that indicate that the asset may be impaired. Following the acquisition of ErisX, which closed on May 2, 2022, negative events and trends in the broader digital asset environment emerged, such as deleveraging and bankruptcies, and certain negative trends in the broader digital asset environment which emerged in late 2021 intensified, such as the decline in digital asset prices, overall market activity, and market capitalization. Additionally, following the acquisition of ErisX, the efforts to syndicate minority ownership interests in Cboe Digital to potential investors became more challenging and the outlook for the Digital segment’s future market growth has been negatively impacted. However, ownership of ErisX allows the Company to enter the digital asset spot and derivatives marketplaces through a digital-first platform developed with industry partners to focus on robust regulatory compliance, data and transparency. The Company considered these developments, in particular the recent syndication efforts, to be potential indications of impairment and performed an interim impairment test for the goodwill recognized in the Digital reporting unit. The Company concluded that the carrying value of the reporting unit exceeded its estimated fair value, which considered both market and income approaches, and recorded a goodwill impairment charge of $460.1 million in the condensed consolidated statements of income for the three and six months ended June 30, 2022, and also recognized a deferred tax asset of $116.2 million. This deferred tax asset, resulting from the excess of tax deductible goodwill over book goodwill, relates to future tax deductions the Company expects to realize to reduce potential tax payments on future income. As a result, the carrying value of ErisX decreased by $343.9 million, to $220.0 million as of June 30, 2022. The Company also performed testing over the intangible assets recognized as a result of the ErisX acquisition, and based on the results of the assessments, determined there was no impairment required as the fair value approximated the carrying value. No other long lived assets were recognized as a result of the acquisition and subject to further assessment. The following table presents the details of the intangible assets (in millions):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | North American | ​ | Europe and | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Options |  | Equities |  | Asia Pacific |  | Global FX |  | Digital |  | Total
Balance as of December 31, 2021 | ​ | $ | 159.1 | ​ | $ | 991.4 | ​ | $ | 426.4 | ​ | $ | 91.7 | ​ | $ | — | ​ | $ | 1,668.6
Additions | ​ | ​ | — | ​ |  | 130.1 | ​ |  | — | ​ |  | — | ​ |  | 95.9 | ​ | ​ | 226.0
Amortization | ​ |  | (6.6) | ​ |  | (30.1) | ​ |  | (12.7) | ​ | ​ | (9.7) | ​ | ​ | (1.3) | ​ |  | (60.4)
Changes in foreign currency exchange rates | ​ |  | — | ​ |  | (0.5) | ​ | ​ | (40.9) | ​ |  | — | ​ |  | — | ​ |  | (41.4)
Balance as of June 30, 2022 | ​ | $ | 152.5 | ​ | $ | 1,090.9 | ​ | $ | 372.8 | ​ | $ | 82.0 | ​ | $ | 94.6 | ​ | $ | 1,792.8
​ For the three months ended June 30, 2022 and 2021, amortization expense was $29.8 million and $30.6 million, respectively. For the six months ended June 30, 2022 and 2021, amortization expense was $60.4 million and $63.5 million, respectively. The estimated future amortization expense is $65.1 million for the remainder of 2022, $119.5 million for 2023, $95.5 million for 2024, $84.5 million for 2025, and $77.3 million for 2026. The following tables present the categories of intangible assets as of June 30, 2022 and December 31, 2021 (in millions, except as stated):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2022 | ​ | Weighted
​ | ​ | ​ | ​ | ​ | North | ​ | Europe | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Average
​ | ​ | ​ | ​ | American | ​ | and Asia | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Amortization
​ |  | Options |  | Equities |  | Pacific |  | Global FX |  | Digital |  | Period (in years)
Trading registrations and licenses | ​ | $ | 95.5 | ​ | $ | 615.2 | ​ | $ | 199.6 | ​ | $ | — | ​ | $ | 25.0 | ​ | Indefinite
Customer relationships | ​ |  | 46.6 | ​ |  | 471.0 | ​ |  | 209.3 | ​ |  | 140.0 | ​ |  | — | ​ | 16
Market data customer relationships | ​ |  | 53.6 | ​ |  | 322.0 | ​ |  | 58.6 | ​ |  | 64.4 | ​ |  | — | ​ | 10
Technology | ​ |  | 28.1 | ​ |  | 52.7 | ​ |  | 32.8 | ​ |  | 22.5 | ​ |  | 70.0 | ​ | 8
Trademarks and tradenames | ​ |  | 12.9 | ​ |  | 10.1 | ​ |  | 2.3 | ​ |  | 1.2 | ​ |  | — | ​ | 6
Digital assets held | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 0.9 | ​ | Indefinite
Accumulated amortization | ​ |  | (84.2) | ​ |  | (380.1) | ​ |  | (129.8) | ​ |  | (146.1) | ​ |  | (1.3) | ​ | ​
​ | ​ | $ | 152.5 | ​ | $ | 1,090.9 | ​ | $ | 372.8 | ​ | $ | 82.0 | ​ | $ | 94.6 | ​ | ​
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2021 | ​ | Weighted
​ | ​ | ​ | ​ | ​ | North | ​ | Europe | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Average
​ | ​ | ​ | ​ | American | ​ | and Asia | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Amortization
​ |  | Options |  | Equities |  | Pacific |  | Global FX |  | Digital |  | Period (in years)
Trading registrations and licenses | ​ | $ | 95.5 | ​ | $ | 592.0 | ​ | $ | 221.1 | ​ | $ | — | ​ | $ | — | ​ | Indefinite
Customer relationships | ​ |  | 46.6 | ​ | ​ | 378.3 | ​ | ​ | 232.3 | ​ | ​ | 140.0 | ​ | ​ | — | ​ | 17
Market data customer relationships | ​ |  | 53.6 | ​ | ​ | 322.0 | ​ | ​ | 65.2 | ​ | ​ | 64.4 | ​ | ​ | — | ​ | 10
Technology | ​ |  | 28.1 | ​ | ​ | 41.1 | ​ | ​ | 35.6 | ​ | ​ | 22.5 | ​ | ​ | — | ​ | 5
Trademarks and tradenames | ​ |  | 12.9 | ​ | ​ | 7.8 | ​ | ​ | 2.5 | ​ | ​ | 1.2 | ​ | ​ | — | ​ | 8
Accumulated amortization | ​ |  | (77.6) | ​ | ​ | (349.8) | ​ | ​ | (130.3) | ​ | ​ | (136.4) | ​ | ​ | — | ​ | ​
​ | ​ | $ | 159.1 | ​ | $ | 991.4 | ​ | $ | 426.4 | ​ | $ | 91.7 | ​ | $ | — | ​ | ​
​ ErisX holds customer digital assets in customer accounts, referred to as wallets, either through a third-party custodian, a licensed trust company, or in separate and distinct wallets managed by ErisX. ErisX, together with its third-party custodian, is directly responsible for securing customers’ crypto assets and protecting them from loss or theft. Customer digital assets are held in omnibus wallets for the benefit of customers of ErisX and ErisX maintains the records of the amount and type of digital asset owned by each of its customers in omnibus wallets. The amount of customer digital assets held by ErisX is reflected within digital assets – safeguarded assets and digital assets – safeguarded liabilities in the condensed consolidated balance sheets.

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
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