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Goodwill and Other Intangible Assets, Net
 12 Months Ended
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets, Net GOODWILL AND OTHER INTANGIBLE ASSETS, NET
Goodwill
Movements in goodwill attributable to each reportable segment during the years ended December 31, 2022 and 2023 were as follows:
(DOLLARS IN MILLIONS)NourishHealth & BiosciencesScentPharma SolutionsTotal
Balance at December 31, 2021$6,559 $6,763 $1,828 $1,282 $16,432 
Acquisitions(1)
— 45 — — 45 
Impairment— (2,250)— — (2,250)
Transferred to assets held for sale(2)
(306)— (42)— (348)
Foreign exchange(199)(223)(41)(43)(506)
Balance at December 31, 20226,054 4,335 1,745 1,239 13,373 
Impairment(2,623)— — — (2,623)
Transferred to assets held for sale(3)
— — (267)— (267)
Reduction from business divestiture(14)— — — (14)
Foreign exchange72 56 12 26 166 
Balance at December 31, 2023$3,489 $4,391 $1,490 $1,265 $10,635 
_______________________
(1)Related to the acquisition of Health Wright. See Note 3 for additional information.
(2)Related to the portion of the Savory Solutions business and FSI business that were classified as held for sale as of December 31, 2022. The Company completed the divestitures of the businesses on May 31, 2023 and August 1, 2023, respectively. See Note 4 and Note 21 for additional information.
(3)Related to the Cosmetic Ingredients business that was classified as held for sale as of December 31, 2023. See Note 21 for additional information.
The goodwill balance at December 31, 2023 included $2.623 billion and $2.250 billion of accumulated impairment related to the Nourish and Health & Biosciences reportable segments, respectively. The goodwill balance at December 31, 2022
included $2.250 billion of accumulated impairment related to the Health & Biosciences reportable segment. The accumulated impairment relates to impairment charges recorded in 2023 and 2022.
Goodwill Impairment Test
For the annual impairment test as of November 30, 2023, the Company first utilized Step 0 of the guidance in ASC Topic 350, Intangibles – Goodwill and Other, which allows for the assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If, based on a review of qualitative factors, it is more likely than not that the fair value of a reporting unit is less than its carrying value, a quantitative impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. Based on a review of qualitative factors, the Company determined that for one of the reporting units, Cosmetic Ingredients, a quantitative (Step 1) impairment analysis was not necessary to determine if the carrying values of the reporting unit exceeded its fair values. For the other five reporting units, the Company determined that a Step 1 test was necessary.
The Company assessed the fair value of the reporting units using an income approach. Under the income approach, the Company determined the fair value by using a discounted cash flow method at a rate of return that reflects the relative risk of the projected future cash flows of each reporting unit, as well as a terminal value. The Company used the most current actual and forecasted operating data available. Key estimates and assumptions used in these valuations include revenue growth rates, gross margins, adjusted operating EBITDA margins, terminal growth rates and discount rates.
In performing the quantitative impairment test, the Company determined that the fair value of four of the five reporting units exceeded their carrying values and determined that there was no further impairment of goodwill in these reporting units as of November 30, 2023. The Company determined that the carrying value of the Nourish reporting unit exceeded its fair value and recorded an impairment charge of $2.623 billion in the Consolidated Statements of (Loss) Income and Comprehensive Loss for the year ended December 31, 2023. The primary drivers of the impairment charge was a decrease in fair value due to declines in projections of the reporting unit, impacts of continued inflation and increases in interest rates. Based on the quantitative impairment test performed, the Company determined that the Health & Biosciences, Fragrance Ingredients and Pharma Solutions reporting units had excess fair value over carrying value of less than 25%. As of November 30, 2023, the Health & Biosciences, Fragrance Ingredients and Pharma Solutions reporting units had excess fair value over carrying value of approximately 8%, 18% and 8%, respectively, and goodwill of approximately $4.381 billion, $295 million and $1.263 billion, respectively.
While management believes that the assumptions used in the impairment test were reasonable, changes in key assumptions, including lower revenue growth, operating margin, terminal growth rates or increase in discount rates could result in a future impairment. Such charge could have a material effect on the Consolidated Statements of Operations and Balance Sheets.
During 2022, the Company determined that goodwill impairment triggering events occurred for its Nourish, Health & Biosciences and Pharma Solutions reporting units. The primary indicators that were deemed to be triggering events were declines in the Company’s projections across various reporting units and ongoing adverse macroeconomic impacts such as inflation, increases in interest rates and unfavorable effects from exchange rates.
Based on the quantitative impairment test, using the income approach, the Company determined that the carrying value of the Health & Biosciences reporting unit exceeded its fair value and recorded a goodwill impairment charge of $2.250 billion in the Consolidated Statements of (Loss) Income and Comprehensive Loss for the year ended December 31, 2022.
Other Intangible Assets
Other intangible assets, net consisted of the following amounts:
 December 31,
(DOLLARS IN MILLIONS)20232022
Asset Type
Customer relationships$8,211 $8,318 
Technological know-how2,355 2,339 
Trade names & patents337 358 
Other44 47 
Total carrying value 10,947 11,062 
Accumulated Amortization
Customer relationships(1,619)(1,252)
Technological know-how(813)(589)
Trade names & patents(117)(97)
Other(41)(42)
Total accumulated amortization(2,590)(1,980)
Other intangible assets, net$8,357 $9,082 
Amortization
Amortization expense was $680 million for the year ended December 31, 2023, $727 million for the year ended December 31, 2022 and $732 million for the year ended December 31, 2021. Amortization expense for the next five years, based on valuations and determinations of useful lives, is expected to be as follows:
December 31,
(DOLLARS IN MILLIONS)20242025202620272028
Estimated future intangible amortization expense$678 $676 $674 $577 $558 
Impairment of Intangible Assets
As discussed in Note 1, for the year ended December 31, 2022, an impairment charge of approximately $92 million was recorded in connection with intangible assets, primarily customer relationships and technological know-how, of an asset group that operated primarily in Russia, which was included within accumulated amortization.