NOTE G – GOODWILL AND OTHER INTANGIBLES

Goodwill

Ashland reviews goodwill and indefinite-lived intangible assets for impairment annually or when events and circumstances indicate an impairment may have occurred. This annual assessment is performed as of July 1 and consists of Ashland determining each reporting unit’s current fair value compared to its current carrying value. For its July 1, 2017 assessment, Ashland determined that its reporting units for the allocation of goodwill are its three reportable segments: Specialty Ingredients, Composites and Intermediates and Solvents. At that time, Ashland determined no additional impairment existed.

The following is a progression of goodwill by reportable segment for the nine months ended June 30, 2018.

	Specialty						Intermediates
(In millions)	Ingredients			Composites			and Solvents		(a)	Total
Balance at September 30, 2017	$	2,315		$	150		$	—		$	2,465
Acquisitions (b)		7			—			—			7
Currency translation		(19	)		(6	)		—			(25	)
Balance at June 30, 2018	$	2,303		$	144		$	—		$	2,447

(a)

As of June 30, 2018 and September 30, 2017, there was accumulated impairment of $171 million related to the Intermediates and Solvents reportable segment.

(b)

Relates to the acquisition of Vornia Limited and subsequent adjustments to the initial purchase price of Pharmachem during the nine months ended June 30, 2018. See Note C for more information.

Other intangible assets

Intangible assets principally consist of trademarks and trade names, intellectual property and customer and supplier relationships. Intangible assets classified as finite are amortized on a straight-line basis over their estimated useful lives. The cost of trademarks and trade names is amortized principally over 3 to 25 years, intellectual property over 5 to 25 years, and customer and supplier relationships over 3 to 24 years.

Ashland annually reviews indefinite-lived intangible assets for possible impairment or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable.

Intangible assets were comprised of the following as of June 30, 2018 and September 30, 2017.

	June 30, 2018
	Gross					Net
	carrying		Accumulated			carrying
(In millions)	amount		amortization			amount
Definite-lived intangibles
Trademarks and trade names	$	67	$	(24	)	$	43
Intellectual property		758		(360	)		398
Customer and supplier relationships		769		(262	)		507
Total definite-lived intangibles		1,594		(646	)		948

Indefinite-lived intangibles
Trademarks and trade names		301		—			301
Total intangible assets	$	1,895	$	(646	)	$	1,249

	September 30, 2017
	Gross					Net
	carrying		Accumulated			carrying
(In millions)	amount		amortization			amount
Definite-lived intangibles
Trademarks and trade names	$	67	$	(22	)	$	45
Intellectual property		757		(326	)		431
Customer and supplier relationships		777		(235	)		542
Total definite-lived intangibles		1,601		(583	)		1,018

Indefinite-lived intangibles
Trademarks and trade names		301		—			301
Total intangible assets	$	1,902	$	(583	)	$	1,319

Amortization expense recognized on intangible assets was $24 million and $20 million for the three months ended June 30, 2018 and 2017, respectively, and $71 million and $58 million for the nine months ended June 30, 2018 and 2017, respectively, and is included in the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss). Estimated amortization expense for future periods is $95 million in 2018 (includes nine months actual and three months estimated), $91 million in 2019, $90 million in 2020, $89 million in 2021 and $88 million in 2022. The amortization expense for future periods is an estimate. Actual amounts may change from such estimated amounts due to fluctuations in foreign currency exchange rates, additional intangible asset acquisitions and divestitures, potential impairment, accelerated amortization, or other events.