INTERNATIONAL BUSINESS MACHINES CORPIBM
INTERNATIONAL BUSINESS MACHINES CORP Goodwill & Intangibles Disclosure
INTANGIBLE ASSETS INCLUDING GOODWILL
Intangible Assets
The following tables present the company’s intangible asset balances by major asset class.
| ($ in millions) | ||||||||||||||||||||
| At December 31, 2025: | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount (1) | |||||||||||||||||
| Intangible asset class | ||||||||||||||||||||
| Capitalized software | $ | 1,388 | $ | (424) | $ | 964 | ||||||||||||||
| Client relationships | 11,261 | (5,602) | 5,659 | |||||||||||||||||
| Completed technology | 7,399 | (4,096) | 3,304 | |||||||||||||||||
| Patents/trademarks | 2,030 | (665) | 1,365 | |||||||||||||||||
Other (2) | 139 | (40) | 99 | |||||||||||||||||
| Total | $ | 22,218 | $ | (10,827) | $ | 11,391 | ||||||||||||||
| ($ in millions) | ||||||||||||||||||||
| At December 31, 2024: | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount (1) | |||||||||||||||||
| Intangible asset class | ||||||||||||||||||||
| Capitalized software | $ | 1,282 | $ | (492) | $ | 790 | ||||||||||||||
| Client relationships | 9,704 | (4,387) | 5,317 | |||||||||||||||||
| Completed technology | 6,297 | (3,164) | 3,132 | |||||||||||||||||
| Patents/trademarks | 1,826 | (519) | 1,307 | |||||||||||||||||
Other (2) | 138 | (24) | 114 | |||||||||||||||||
| Total | $ | 19,247 | $ | (8,587) | $ | 10,660 | ||||||||||||||
(1)Amounts at December 31, 2025 and 2024 include an increase in the net intangible asset balance of $182 million and a decrease in the net intangible asset balance of $126 million, respectively, due to foreign currency translation.
(2)Other intangibles are primarily acquired proprietary and nonproprietary technology licenses, data, business processes, methodologies and systems.
There was no impairment of intangible assets recorded in 2025 and 2024. The net carrying amount of intangible assets increased $731 million during the year ended December 31, 2025, primarily due to additions of acquired intangibles from business combinations of $2,491 million, primarily driven by the acquisition of HashiCorp in the first quarter of 2025, and additions of capitalized software, partially offset by intangible asset amortization. The aggregate intangible amortization expense was $2,737 million and $2,499 million for the years ended December 31, 2025 and 2024, respectively. In addition, in 2025 and 2024, respectively, the company retired $725 million and $923 million of fully amortized intangible assets, impacting both the gross carrying amount and accumulated amortization by this amount.
The future amortization expense relating to intangible assets currently recorded in the Consolidated Balance Sheet is estimated to be the following at December 31, 2025:
| ($ in millions) | Capitalized Software | Acquired Intangibles | Total | |||||||||||||||||
| 2026 | $ | 490 | $ | 2,283 | $ | 2,773 | ||||||||||||||
| 2027 | 333 | 2,245 | 2,578 | |||||||||||||||||
| 2028 | 141 | 1,939 | 2,081 | |||||||||||||||||
| 2029 | 0 | 1,254 | 1,254 | |||||||||||||||||
| 2030 | — | 812 | 812 | |||||||||||||||||
| Thereafter | — | 1,894 | 1,894 | |||||||||||||||||
Goodwill
The changes in the goodwill balances by reportable segment for the years ended December 31, 2025 and 2024 are as follows:
| ($ in millions) | ||||||||||||||||||||||||||||||||||||||
| Segment | Balance at January 1, 2025 | Goodwill Additions | Purchase Price Adjustments | Divestitures | Foreign Currency Translation and Other Adjustments (1) | Balance at December 31, 2025 | ||||||||||||||||||||||||||||||||
| Software | $ | 47,136 | $ | 5,004 | $ | (8) | $ | — | $ | 855 | $ | 52,987 | ||||||||||||||||||||||||||
| Consulting | 9,206 | 908 | 10 | — | 217 | 10,341 | ||||||||||||||||||||||||||||||||
| Infrastructure | 4,363 | — | 0 | 0 | 26 | 4,389 | ||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Total | $ | 60,706 | $ | 5,912 | $ | 1 | $ | 0 | $ | 1,098 | $ | 67,717 | ||||||||||||||||||||||||||
| ($ in millions) | ||||||||||||||||||||||||||||||||||||||
| Segment | Balance at January 1, 2024 | Goodwill Additions | Purchase Price Adjustments | Divestitures | Foreign Currency Translation and Other Adjustments (1) | Balance at December 31, 2024 | ||||||||||||||||||||||||||||||||
| Software | $ | 46,447 | $ | 1,511 | $ | (51) | $ | — | $ | (770) | $ | 47,136 | ||||||||||||||||||||||||||
| Consulting | 8,883 | 469 | (3) | (1) | (142) | 9,206 | ||||||||||||||||||||||||||||||||
| Infrastructure | 4,384 | 8 | (1) | — | (28) | 4,363 | ||||||||||||||||||||||||||||||||
Other (2) | 464 | — | — | (464) | — | — | ||||||||||||||||||||||||||||||||
| Total | $ | 60,178 | $ | 1,987 | $ | (55) | $ | (465) | $ | (940) | $ | 60,706 | ||||||||||||||||||||||||||
(1)Primarily driven by foreign currency translation.
(2)In the first quarter of 2024, the company derecognized goodwill related to the divestiture of The Weather Company assets. Refer to note E, "Acquisitions & Divestitures," for additional information.
Goodwill additions recorded in 2025 were primarily driven by the acquisition of HashiCorp. Refer to note E, "Acquisitions & Divestitures," for additional information.
There were no goodwill impairment losses recorded during 2025 or 2024, and the company has no accumulated impairment losses. Purchase price adjustments recorded in 2025 and 2024 were related to acquisitions that were still subject to the measurement period that ends at the earlier of 12 months from the acquisition date or when information becomes available. Net purchase price adjustments recorded in 2025 and 2024 were not material.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 23, 2016 | |
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.