BEST BUY CO INCBBY

BEST BUY CO INC Goodwill & Intangibles Disclosure

10-KFiled Mar 18, 20262 min read
Goodwill and Intangible Assets
Goodwill

Goodwill balances by segment were as follows ($ in millions):
January 31, 2026February 1, 2025
Gross Carrying AmountCumulative ImpairmentGross Carrying AmountCumulative Impairment
Domestic$1,450 $(660)$1,450 $(542)
International608 (608)608 (608)
Total$2,058 $(1,268)$2,058 $(1,150)
In the third quarter of fiscal 2026, we recorded a goodwill impairment of $118 million within the Domestic segment for the Best Buy Health reporting unit. The carrying value of the Best Buy Health reporting unit as of January 31, 2026, was $298 million. A change in Best Buy Health’s customer base during the third quarter of fiscal 2026 resulted in an impairment review of all Best Buy Health assets. The fair value of Best Buy Health was estimated primarily based on DCF analysis. The impairment reflects downward revisions of our revenue growth rates and margin rates compared to previous projections, in part due to pressures in the Medicaid and Medicare Advantage markets. In addition, definite-lived intangible asset impairments and long-lived asset impairments were also recorded. Refer to Note 4, Fair Value Measurements, for additional information. No further impairments were identified in the fourth quarter of fiscal 2026.

Indefinite-Lived Intangible Assets

In the second quarter of fiscal 2026, we recorded a full impairment of $16 million related to our only remaining indefinite-lived intangible asset as a result of restructuring activity that commenced in the second quarter of fiscal 2026. Refer to Note 2, Restructuring, for additional information.

Definite-Lived Intangible Assets

We have definite-lived intangible assets recorded within Other assets on our Consolidated Balance Sheets as follows ($ in millions):
January 31, 2026February 1, 2025Weighted-Average
Useful Life Remaining as of January 31, 2026 (in years)
Gross Carrying Amount(1)
Accumulated Amortization(1)
Gross Carrying AmountAccumulated Amortization
Customer relationships(2)
$339 $339 $360 $285 -
Tradenames87 82 92 79 0.7
Developed technology56 56 64 61 -
Total$482 $477 $516 $425 0.7
(1)Gross carrying amount and accumulated amortization as of January 31, 2026, excludes $34 million and $16 million, respectively, of definite-lived intangible assets related to the exit of a component of our Best Buy Health business in the second quarter of fiscal 2026. See Note 2, Restructuring, for additional information.
(2)Accumulated amortization as of January 31, 2026, includes $53 million of impairments related to Best Buy Health included in Goodwill and intangible asset impairments on our Consolidated Statements of Earnings.

Amortization expense, included in SG&A on our Consolidated Statements of Earnings, was as follows ($ in millions):
202620252024
Amortization expense$14 $21 $61 
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Historical Timeline

Fiscal YearFiled
2026Mar 18, 2026Showing above
2025Mar 19, 2025
2024Mar 15, 2024
2023Mar 17, 2023
2022Mar 18, 2022
2021Mar 19, 2021
2020Mar 23, 2020

About Goodwill & Intangibles Disclosures

Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.

Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.

Other Available Disclosures

Income TaxesRevenueFair ValuePP&ELeasesSegmentsDebtCommitmentsNew Standards