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Goodwill and Intangibles
 12 Months Ended
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangibles Goodwill and Intangibles
Goodwill
The following table summarizes the changes in the carrying amount of goodwill:
Balance as of December 31, 2020
$6,225 
Bayer Animal Health measurement period adjustments207 
Additions related to the KindredBio acquisition33 
Goodwill associated with Shawnee, Speke and other divestitures(64)
Foreign currency translation adjustments(229)
Balance as of December 31, 2021
6,172 
KindredBio measurement period adjustments3 
Goodwill associated with Speke divestiture(3)
Foreign currency translation adjustments(179)
Balance as of December 31, 2022
$5,993 
Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired. Goodwill is not amortized, but is reviewed for impairment at least annually and when certain qualitative impairment indicators are present. When required, a comparison of fair value to the carrying amount of our single reporting unit is performed to determine the amount of any impairment. We begin by assessing qualitative factors to determine whether it is more likely than not that the fair value of our single reporting unit is less than its carrying value. Based on that qualitative assessment, if we conclude that it is more likely than not that the fair value of our single reporting unit is less than its carrying value, we conduct a quantitative goodwill impairment test, which involves comparing the estimated fair value of our single reporting unit to its carrying value, including goodwill. We estimate the fair value of our single reporting unit using an income approach. If the carrying value of the reporting unit exceeds its estimated fair value, we recognize an impairment loss for the difference.
During the third quarter of 2022, a significant change in our market capitalization relative to our book value, among other factors, triggered the need for an impairment review. However, no impairment existed with respect to our goodwill because the estimated fair value of our single reporting unit exceeded the carrying amount by more than 20%. Given the general worldwide economic conditions, we reevaluated our impairment testing from a qualitative perspective as December 31, 2022, which did not result in a change to our previous conclusion that no impairment exists.

No impairments have occurred with respect to the carrying value of goodwill for the years ended December 31, 2022, 2021 and 2020. Since a significant portion of our goodwill is denominated in foreign currencies, changes to our goodwill balance can occur over time due to changes in foreign exchange rates. See Note 6: Acquisitions, Divestitures and Other Arrangements for further discussion related to goodwill resulting from recent business combinations and changes in the carrying amount of goodwill.
Other Intangibles
The components of intangible assets other than goodwill as of December 31 were as follows:
2022
2021
Description
Carrying Amount, Gross
Accumulated Amortization
Carrying Amount, Net
Carrying Amount, Gross
Accumulated Amortization
Carrying Amount, Net
Finite-lived intangible assets:
Marketed products$6,561 $(2,275)$4,286 $6,828 $(1,837)$4,991 
Software310 (135)175 285 (77)208 
Other47 (31)16 47 (28)19 
Total finite-lived intangible assets6,918 (2,441)4,477 7,160 (1,942)5,218 
Indefinite-lived intangible assets:
Acquired in-process research and development365 — 365 369 — 369 
Other intangible assets$7,283 $(2,441)$4,842 $7,529 $(1,942)$5,587 
Marketed products consist of the amortized cost of the rights to assets acquired in business combinations and approved for marketing in a significant global jurisdiction. Also included in this category are post-approval milestone payments from transactions other than a business combination.
Software consists of certain costs incurred in connection with obtaining or developing internal-use software, including payroll and payroll-related costs for employees directly associated with the internal-use software projects and direct costs of external resources. These costs include software classified as "in process" until the project is substantially complete and the software is ready for its intended purpose, at which point the costs are amortized on a straight-line basis over the estimated useful life. For the years ended December 31, 2022, 2021 and 2020, depreciation expense included software amortization of $65 million, $52 million, and $35 million, respectively.
Other finite-lived intangibles consist primarily of the amortized cost of licensed platform technologies that have alternative future uses in research and development, manufacturing technologies and customer relationships from business combinations. Acquired IPR&D consists of capitalized R&D costs, adjusted for subsequent impairments, if any. The costs of acquired IPR&D projects acquired directly in a transaction other than a business combination are capitalized if the projects have an alternative future use; otherwise, they are expensed immediately. The fair values of acquired IPR&D projects acquired in business combinations are capitalized as other intangible assets.
Several methods may be used to determine the estimated fair value of marketed products, IPR&D, and other finite-lived intangibles acquired in a business combination. We utilize the "income method" for these intangibles. This method is a Level 3 fair value measurement and applies a probability weighting that considers the risk of development and commercialization to the estimated future net cash flows that are derived from projected revenues and estimated costs. These projections are based on factors such as relevant market size, patent protection, historical pricing of similar products and expected industry trends. The estimated future net cash flows are then discounted to the present value using an appropriate discount rate. This analysis is performed for each group of assets independently. The acquired IPR&D assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets are tested for impairment and amortized over the remaining useful life or written off, as appropriate.
Indefinite-lived intangible assets are reviewed for impairment at least annually and when impairment indicators are present. The fair value of the indefinite lived intangible assets (acquired IPR&D) is estimated using the same assumptions as those used for goodwill and by applying a probability weighting that reflects the risk of development and commercialization to the estimated future net cash flows that are derived from projected revenues and estimated costs. Finite-lived intangible assets are reviewed for impairment when an indicator of impairment is present. We compare the carrying amounts of the assets with the estimated undiscounted future cash flows. In the event the carrying amount exceeds the undiscounted cash flows, an impairment charge is recorded for the amount by which the carrying amount of the asset exceeds the estimated fair value, which is determined based on discounted future cash flows.
Impairment charges recorded in relation to our other intangible assets were as follows:
202220212020
Asset impairment, restructuring and other special charges$60 $66 $17 

During 2022, we recorded impairment charges comprised of $59 million for acquired IPR&D and $1 million for an other finite-lived intangible asset. The charge for acquired IPR&D primarily related to the expensing of an IPR&D asset with no alternative future use licensed from BexCaFe during the second quarter of 2022. See Note 6: Acquisitions, Divestitures and Other Arrangements for further discussion. The charge recorded for the other finite-lived intangible asset resulted from the termination of a license, development and commercialization agreement during the fourth quarter of 2022. As a result of the termination of the arrangement, the related technology had no alternative future use.
During 2021, we recorded impairment charges comprised of $55 million for acquired IPR&D and $11 million for marketed products. The impairments to acquired IPR&D primarily related to adjustments to the fair value of IPR&D assets that were subject to product rationalization, including a decision by management to terminate a project and fully impair the related asset associated with a farm animal parasiticide. The decision was prompted by unfavorable efficacy results observed during the year. The impairments of marketed products related to a full impairment based on a reassessment of competitive viability and project priority for an approved asset and an adjustment to the fair value of a mature brand that is subject to near-term product rationalization.
During 2020, we recorded impairment charges comprised of $9 million for acquired IPR&D and $8 million for marketed products. The impairment to acquired IPR&D related to reassessments of geographic viability and project priority, which were partially prompted by the addition of the Bayer Animal Health IPR&D pipeline. The impairment of marketed products related to adjustments made to record assets classified as held for sale at the lower of their carrying amounts or fair values less costs to sell.

Intangible assets with finite lives are capitalized and are amortized over their estimated useful lives, ranging from 3 to 20 years. As of December 31, 2022, the remaining weighted-average amortization periods for finite-lived intangible assets were as follows:
Weighted Average Life (Years)
Marketed products9
Software5
Other5
The estimated amortization expense for each of the next five years associated with our finite-lived intangible assets as of December 31, 2022 is as follows:
20232024202520262027
Estimated amortization expense$512 $510 $491 $488 $456