NOTE 8    GOODWILL

Changes in the carrying amount of goodwill for fiscal years 2004 and 2005 by segment, are as follows:

(In millions)
	Balance as of June 30, 2003		Acquisitions / purchase accounting adjustments		Divestitures		Balance as of June 30, 2004		Acquisitions / purchase accounting adjustments		Divestitures		Balance as of June 30, 2005
Client	$0,037		$(–)		$(0 –)		$0,037		$006		$(0–)		$0,043
Server and Tools	106		–)		–)		106		135		–)		241
Information Worker	180		(2)		–)		178		47		–)		225
Microsoft Business     Solutions	2,219		7)		(19)		2,207		3		–)		2,210
MSN	154		–)		–)		154		17		–)		171
Mobile and Embedded     Devices	28		2)		–)		30		–		–)		30
Home and Entertainment	404		(1)		–)		403		–		(14)		389
Total	$3,128		$(6)		$(19)		$3,115		$208		$(14)		$3,309

We test goodwill for impairment annually during the first quarter of each fiscal year 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 impairment charges to goodwill in fiscal years 2004 and 2005. 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. During fiscal years 2004 and 2005, we had no material acquisitions.