Microsoft 2008 Annual Report Download - page 52

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PAGE 51
NOTE 9 GOODWILL
Changes in the carrying amount of goodwill for fiscal years 2008 and 2007 by segment were as follows:
(In millions)
Balance as
of June 30,
2008 Acquisitions Other
Balance as
of June 30,
2007 Acquisitions
Other
Balance as
of June 30,
2006
Client $ 153 $77 $(1) $77
$ 6 $ (3)
$
74
Server and Tools 738 90 68 580 325 (1) 256
Online Services Business 6,274 5,775 (53) 552 123
(
26) 455
Microsoft Business Division 4,191 1,073 (14) 3,132 508
(
57) 2,681
Entertainment and Devices Division 752 354 (21) 419 21 (2) 400
Total $
1
2,108 $
7
,369 $
(
21)
$
4,760 $ 983 $
(
89)
$
3,866
We test goodwill for impairment annually on July 1 at the reporting unit level using a fair value approach, in
accordance with the provisions of SFAS No. 142, Goodwill and Other Intangible Assets. Our annual testing
resulted in no impairments of goodwill in fiscal years 2008 and 2007. If an event occurs or circumstances change
that would more likely than not reduce the fair value of a reporting unit below its carrying value, goodwill will be
evaluated for impairment between annual tests.
None of the amount recorded as goodwill during fiscal year 2008 is expected to be deductible for tax purposes.
The purchase price allocation for acquisitions is preliminary for up to 12 months after the acquisition date and
subject to revision as more detailed analyses are completed and additional information about fair value of assets
and liabilities become available. Any change in the fair value of the net assets of the acquired company will
change the amount of the purchase price allocable to goodwill. Purchase price adjustments are included in “other”
in the above table.
NOTE 10 INTANGIBLE ASSETS
The components of finite-lived intangible assets were as follows:
(In millions)
June 30,
2008 2007
Gross
carrying
amount
Accumulated
amortization
Net carrying
amount
Gross
carrying
amount
Accumulated
amortization
Net carrying
amount
Contract-based $
1
,074 $(796) $ 278 $ 988 $ (727) $261
Technology-based 1,677 (672) 1,005 916 (407) 509
Marketing-related 171 (65) 106 57 (39) 18
Customer-related 708 (124) 584 122 (32) 90
Total
$
3
,630 $
(
1,657) $
1
,973 $
2
,083 $
(
1,205) $878