NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 9 Other Assets Goodwill Intangible Assets Change in Accounting Policy 78 BMO FINANCIAL GROUP ANNUAL REPORT 2002 We account for acquisitions of businesses using the purchase method.This involves allocating the purchase price paid for a business to the assets acquired, including identifiable intangible assets, and the liabilities assumed based on their fair value at the date of acquisition. Any excess is then recorded as goodwill. We account for acquisitions of assets at the fair value of assets acquired, including identifiable intangible assets.  On February 4, 2002 we completed the acquisition of all outstand- ing voting shares of CSFB direct , Inc., a New Jersey-based direct investing firm previously owned by Credit Suisse First Boston, for total cash consideration of $854. The results of CSFB direct , Inc.’s operations have been included in our consolidated financial  statements since that date. The acquisition of CSFB direct , Inc.  significantly increases our U.S. client base and provides a national franchise for our existing integrated wealth management business in the United States.  As part of this acquisition we acquired a customer relationship intangible asset, which will be amortized on an accelerated basis over 15 years, and a covenant not to compete which will be amor- tized over five years on a straight-line basis. On July 26, 2002 we completed the acquisition of Morgan Stanley Individual Investor Group’s online client accounts for total cash consideration of $153. The online client accounts asset is included  in our customer relationships intangible asset and will be amortized on an accelerated basis over 15 years. On July 13, 2001 we completed the acquisition of all outstanding voting shares of First National Bank of Joliet, a publicly traded, full- service community bank in the United States. The purchase price of $337 consisted of $124 in cash consideration and 5,325,307 of our common shares valued at $213. On July 19, 2001 we completed the acquisition of all outstanding voting shares of Guardian Group of Funds Ltd., a mutual fund sub- sidiary of a publicly traded financial services company in Canada. The purchase price consisted of 4,960,140 of our common shares va lued at $187. NOTE 10 Acquisitions There were no write-downs of goodwill due to impairment during the year ended October 31, 2002. When we acquire a subsidiary, joint venture or investment securities where we exert significant influence we determine the fair value of the net tangible and intangible assets acquired and compare the total to the amount that we paid  f or the investments. Any excess of the amount paid over the fair value of those net assets is considered to be goodwill. Goodwill is tested at least annually for impairment to ensure that its fair value is greater than or equal to book value. Any excess of book value over fair value is charged to income in the period in which impairment is determined. Amortization of intangible assets is recorded in our Consolidated Statement of Income as:  There were no write-downs of intangible assets due to impairment during the years ended October 31, 20 02, 2001 and 2000.  The total estimated amortization expense relating to intangible assets for each of the next five years is $120 for 2003, $111 for 2004, $103 for 2005, $93 for 2006 and $87 for 2007. Prior to November 1, 2001 we amortized goodwill arising from acquisitions made before July 1, 2001 over its useful life. Amortization of goodwill was recorded net of applicable income tax in our Consolidated Statement of Income. Goodwill amor- tization of $56 and $49, net of income tax benefits of $6 and $5, was included in income for the years ended October 31, 2001 and 2000, respectively. If we had continued to amortize this goodwill, goodwill amortization expense for the year ended October 31, 2002 would have been $55, net of an income tax bene fit of $7. When we acquire a subsidiary or make other specific investments, we may acquire intangible assets, which are recorded at their fair value at the time we make the investment.  Intangible assets with a definite life are amortized to income over the period during which we believe the assets will benefit us, generally not exceeding  20 years. We write down intangible assets with a definite life to fair value when the undiscounted cash flows are not expected to allow for recovery of the carry- ing value. Intangible assets with an indefinite life are not subject to amortization; they are tested at least annually for impairment to ensure that their fair value is greater than or equal to book value. Any excess of book value over fair value is charged to income in the period in which impairment is determined. The net assets of acquired businesses, including any goodwill, are allocated to the operating segments to which they relate. Th e goodwill associated with those acquisitions is allocated on this same basis, as illustr ated in the following table: 2002 2001 Accounts receivable, prepaid expenses and  other items $ 5,303 $ 4,657  Accrued interest receivable 723 979 Due from clients, dealers and brokers 7,645 6,483 Unrealized gains and amounts receivable  on derivative contracts  (Note 23) 22,108 23,315 Future income taxes 109 392 35,888 35,826 Intangible assets Customer relationships 489 188 Core deposit intangibles 126 162 Branch distribution network 134 150 Other 24 18 773 518 Goodwill 1,428 798 Intangible assets and goodwill 2,201 1,316 Total $ 38,089 $ 37,142 We had no intangible assets with indefinite lives as at October 31, 2002 and 2001. 2002 2001 2000 I nterest expense $1 3 $ 13 $ 10 Non-interest expense 87 43 23 To tal $ 100 $ 56 $ 33 Corporate Support,  Pe rsonal and  including Co mmer cial Private Investment Technology and For the Year Ended October 31, 2002  Clien t Group Client Group Banking Group Solutions Total Balance at beginning of year $ 452 $ 286 $ 58 $  2 $  798 Acquisitions made during the year — 605 — 1 606 Disposals during the year (2) — — — (2) Effects of foreign exchange and other 5 21 — — 26 Balance at end of year $ 455 $ 912 $ 58 $  3 $ 1,428