Paychex, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangible Assets, Net of Accumulated Amortization

Goodwill and Intangible Assets, Net of Accumulated Amortization

9 Months Ended

Feb. 28, 2018

Goodwill and Intangible Assets, Net of Accumulated Amortization [Abstract]

Goodwill and Intangible Assets, Net of Accumulated Amortization

Note I: Goodwill and Intangible Assets, Net of Accumulated Amortization

The Company had goodwill balances on its Consolidated Balance Sheets of $827.4 million as of February 28, 2018 and $657.1 million as of May 31, 2017. The increase of $170.3 million in goodwill since May 31, 2017 was the result of the acquisitions of HROI in August 2017 and Lessor in February 2018. Refer to Note C for further details.

The Company has certain intangible assets with finite lives. The components of intangible assets, at cost, consisted of the following:



	February 28,		May 31,
In millions	2018		2017
Client lists (1)	$	308.4	$	293.5
Other intangible assets		5.7		5.4
Total intangible assets, gross		314.1		298.9
Less: Accumulated amortization		209.0		241.3
Intangible assets, net of accumulated amortization	$	105.1	$	57.6

⁽¹⁾

Client lists include current estimates of amounts acquired from Lessor as of February 28, 2018. Refer to Note C for further details.

Amortization expense relating to intangible assets was $5.1 million and $14.3 million for the three and nine months ended February 28, 2018, respectively, compared to $4.6 million and $13.5 million for the three and nine months ended February 28, 2017, respectively.

As of February 28, 2018, the estimated amortization expense relating to intangible asset balances for the full year fiscal 2018 and the following four fiscal years is as follows:


In millions	Estimated amortization
Year ending May 31,	expense
2018	$	21.6
2019		25.3
2020		20.8
2021		16.8
2022		13.0

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details