Bank of Montreal 2010 Annual Report Download - page 141

Notes
BMO Financial Group 193rd Annual Report 2010 139
Intangible Assets
Intangible assets related to our acquisitions are recorded at their fair value at the acquisition date. Software is recorded at cost. Intangible assets
by category are as follows:
(Canadian $ in millions) 2010 2009
Accumulated Carrying Accumulated Carrying
Cost amortization value Cost amortization value
Customer relationships 173 81 92 85 41 44
Core deposits 247 179 68 237 175 62
Branch distribution networks 151 142 9 163 142 21
Purchased software – amortizing 543 451 92 546 435 111
Developed software – amortizing 917 513 404 797 446 351
Software under development 146 – 146 70 – 70
Other 26 25 1 24 23 1
Total 2,203 1,391 812 1,922 1,262 660
Certain comparative figures have been reclassified to conform with the current year’s presentation.
Intangible assets are amortized to income over the period during
which we believe the assets will benefit us on either a straight-line or
an accelerated basis, over a period not to exceed 15 years. We have no
significant intangible assets with indefinite lives. The weighted-average
amortization period for customer relationships is 10 years, core
deposits 11 years, branch distribution networks 15 years, purchased
and developed software 5 years and other 6 years.
The aggregate amount of intangible assets acquired during the years
ended October 31, 2010, 2009 and 2008 was $370 million, $199 million
and $244 million, respectively.
Note 14: Other Assets
(Canadian $ in millions) 2010 2009
Accounts receivable, prepaid expenses
and other items 3,792 3,991
Accrued interest receivable 879 817
Due from clients, dealers and brokers 399 636
Tax receivable 2,018 1,795
Insurance asset 204 185
Pension asset (Note 23) 1,900 1,330
Total 9,192 8,754
(1) Other changes in goodwill include the effects of translating goodwill denominated in
foreign currencies into Canadian dollars and purchase accounting adjustments related
to prior-year purchases.
(2) Relates primarily to Moneris Solutions Corporation, bcpbank Canada and Diners Club.
(3) Relates primarily to New Lenox State Bank, First National Bank of Joliet, Household Bank
branches, Mercantile Bancorp, Inc., Villa Park Trust Savings Bank, First National Bank & Trust,
Ozaukee Bank, Merchants and Manufacturers Bancorporation, Inc. and AMCORE.
A continuity of our goodwill by reporting unit for the years ended October 31, 2010 and 2009 is as follows:
Personal and Private BMO
Commercial Client Capital Corporate
(Canadian $ in mil lions) Banking Group Markets Services Total
Technology
P&C P&C Client Investment Private and
Canada U.S. Total Investing Products Banking Insurance Total Operations
Goodwill as at October 31, 2008 105 1,070 1,175 68 206 75 – 349 109 2 1,635
Acquisitions during the year – – – – 6 13 1 20 – – 20
Other (1) 14 (86) (72) – (1) (10) – (11) (3) – (86)
Goodwill as at October 31, 2009 119 984 1,103 68 211 78 1 358 106 2 1,569
Acquisitions during the year 5 86 91 – 7 – – 7 7 – 105
Other (1) (3) (50) (53) – (2) (1) 1 (2) – – (55)
Goodwill as at October 31, 2010 121 (2) 1,020 (3) 1,141 68 (4) 216 (5) 77 (6) 2 363 113 (7) 2 1,619
(4) Relates to BMO Nesbitt Burns Corporation Limited.
(5) Relates to Guardian Group of Funds Ltd., Pyrford International plc and Integra GRS.
(6) Relates primarily to Harris myCFO, Inc. and Stoker Ostler Wealth Advisors, Inc.
(7) Relates to Gerard Klauer Mattison & Co., Inc., BMO Nesbitt Burns Corporation Limited, Griffin,
Kubik, Stephens & Thompson, Inc. and Paloma Securities L.L.C.
We test intangible assets for impairment when events or changes in
circumstances indicate that their carrying value may not be recoverable.
We write them down to fair value when the related undiscounted
cash flows are not expected to allow for recovery of the carrying value.
There were no write-downs of intangible assets due to impairment
during the years ended October 31, 2010, 2009 and 2008.
The total estimated amortization expense related to existing
intangible assets for each of the next five years is $202 million for 2011,
$190 million for 2012, $135 million for 2013, $80 million for 2014 and
$15 million for 2015.