NOTES TO FINANCIAL STATEMENTS
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 | $12,108 | $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.