Intangible Assets and Goodwill

6 Months Ended

Jul. 03, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS AND GOODWILL

Intangible assets that have finite useful lives are amortized over their estimated useful lives. The latest annual impairment assessment of goodwill and indefinite lived intangible assets was completed in the fiscal fourth quarter of 2015. Future impairment tests for goodwill and indefinite lived intangible assets will be performed annually in the fiscal fourth quarter, or sooner, if warranted.



(Dollars in Millions)	July 3, 2016		January 3, 2016
Intangible assets with definite lives:
Patents and trademarks — gross	$	8,633	8,299
Less accumulated amortization	4,974		4,745
Patents and trademarks — net	3,659		3,554
Customer relationships and other intangibles — gross	17,799		17,583
Less accumulated amortization	6,242		5,816
Customer relationships and other intangibles — net	11,557		11,767
Intangible assets with indefinite lives:
Trademarks	7,085		7,023
Purchased in-process research and development	3,393		3,420
Total intangible assets with indefinite lives	10,478		10,443
Total intangible assets — net	$	25,694	25,764

Goodwill as of July 3, 2016 was allocated by segment of business as follows:



(Dollars in Millions)	Consumer		Pharm		Med Devices	Total
Goodwill, net at January 3, 2016	$	7,240	2,889		11,500	21,629
Goodwill, related to acquisitions	225		—		180	405
Goodwill, related to divestitures	—		(10	)	—	(10	)
Currency translation/Other	50		11		19	80
Goodwill, net at July 3, 2016	$	7,515	2,890		11,699	22,104

The weighted average amortization periods for patents and trademarks and customer relationships and other intangible assets are 18 years and 24 years, respectively. The amortization expense of amortizable intangible assets included in cost of products sold was $576 million and $619 million for the fiscal six months ended July 3, 2016 and June 28, 2015, respectively. The estimated amortization expense for the five succeeding years approximates $1.2 billion, before tax, per year. Intangible asset write-downs are included in Other (income) expense, net.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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