securities and a net transfer into Level 3 of $43.9 and $44.4 related to asset-backed securities and corporates during the three and nine months ended July 1, 2012, respectively.
(9) Goodwill and Intangibles, including DAC and VOBA
A summary of the changes in the carrying amounts of goodwill and intangible assets, including FGL’s deferred acquisition costs ("DAC") and value of business acquired ("VOBA") balances, are as follows:
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Intangible Assets |
| Goodwill | | Indefinite Lived | | Definite Lived | | VOBA | | DAC | | Total |
Balance at Balance at September 30, 2012 | $ | 694.2 |
| | $ | 841.1 |
| | $ | 873.9 |
| | $ | 104.3 |
| | $ | 169.2 |
| | $ | 1,988.5 |
|
Acquisitions (Note 3) | 787.7 |
| | 330.0 |
| | 190.6 |
| | — |
| | — |
| | 520.6 |
|
Deferrals | — |
| | — |
| | — |
| | — |
| | 109.2 |
| | 109.2 |
|
Less: Components of amortization - | | | | | | | | | | | |
Periodic amortization | — |
| | — |
| | (57.5 | ) | | (151.8 | ) | | (62.0 | ) | | (271.3 | ) |
Interest | — |
| | — |
| | — |
| | 16.2 |
| | 7.1 |
| | 23.3 |
|
Unlocking | — |
| | — |
| | — |
| | 22.6 |
| | 4.8 |
| | 27.4 |
|
Reclassifications | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
Adjustment for unrealized investment losses, net | — |
| | — |
| | — |
| | 211.3 |
| | 49.6 |
| | 260.9 |
|
Effect of translation | (11.7 | ) | | (4.2 | ) | | (4.5 | ) | | — |
| | — |
| | (8.7 | ) |
Balance at Balance at June 30, 2013 | $ | 1,470.2 |
| | $ | 1,166.9 |
| | $ | 1,002.5 |
| | $ | 202.6 |
| | $ | 277.9 |
| | $ | 2,649.9 |
|
Intangible assets are recorded at cost or at fair value if acquired in a purchase business combination. Definite lived intangible assets include customer relationships, proprietary technology intangibles and certain trade names that are amortized using the straight-line method over their estimated useful lives of ranging from one to twenty years.
Goodwill and indefinite lived trade name intangibles are not amortized and are tested for impairment at least annually at the Company's August financial period end, or more frequently if an event or circumstance indicates that an impairment loss may have been incurred between annual impairment tests.
Amortization of DAC and VOBA is based on the amount of gross margins or profits recognized, including investment gains and losses. The adjustment for unrealized net investment losses represents the amount of DAC and VOBA that would have been amortized if such unrealized gains and losses had been recognized. This is referred to as the "shadow adjustments" as the additional amortization is reflected in other comprehensive income rather than the statement of operations. As of June 30, 2013 and September 30, 2012, the VOBA balance included cumulative adjustments for net unrealized investment (gains) of $128.1 and $339.4, respectively, and the DAC balances included cumulative adjustments for net unrealized investment (gains) of $1.1 and $50.7, respectively. Amortization of VOBA and DAC for the three months ended June 30, 2013 and July 1, 2012 was $37.3 and $23.8, and $27.4 and $3.1 respectively. Amortization of VOBA and DAC for the nine months ended June 30, 2013 and July 1, 2012 was $113.0 and $101.3, and $50.1 and $10.7, respectively.
The above DAC balances include $20.6 and $9.1 of deferred sales inducements ("DSI"), net of shadow adjustments, as of June 30, 2013 and September 30, 2012, respectively.
