Identifiable Intangible Assets and Goodwill

3 Months Ended

Mar. 29, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Identifiable Intangible Assets and Goodwill

A. Identifiable Intangible Assets

Balance Sheet Information



The following table provides the components of Identifiable intangible assets:
	March 29, 2015							December 31, 2014
(MILLIONS OF DOLLARS)	Gross Carrying Amount		Accumulated Amortization			Identifiable Intangible Assets, less Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization			Identifiable Intangible Assets, less Accumulated Amortization
Finite-lived intangible assets
Developed technology rights	$	70,251	$	(44,759	)	$	25,493	$	70,946	$	(44,694	)	$	26,252
Brands	1,910		(869		)	1,041		1,951		(855		)	1,096
Licensing agreements and other	1,057		(897		)	160		991		(832		)	159
	73,219		(46,525		)	26,694		73,887		(46,381		)	27,506
Indefinite-lived intangible assets
Brands and other	7,206					7,206		7,273					7,273
In-process research and development	434					434		387					387
	7,640					7,640		7,660					7,660
Identifiable intangible assets^(a)	$	80,859	$	(46,525	)	$	34,334	$	81,547	$	(46,381	)	$	35,166


^(a)	The decrease in identifiable intangible assets, less accumulated amortization, is primarily related to amortization, partially offset by assets acquired as part of the acquisition of Baxter's portfolio of marketed vaccines. For information about the assets acquired as part of the acquisition of Baxter's portfolio of marketed vaccines, see Note 2A.



Our identifiable intangible assets are associated with the following segments, as a percentage of total identifiable intangible assets, less accumulated amortization:
	March 29, 2015
	GIP		VOC		GEP
Developed technology rights	31	%	36	%	33	%
Brands, finite-lived	—	%	80	%	20	%
Brands, indefinite-lived	—	%	69	%	31	%
In-process research and development	7	%	38	%	55	%

Amortization

Amortization expense related to finite-lived acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute products, compounds and intellectual property is included in Amortization of intangible assets, as these intangible assets benefit multiple business functions. Amortization expense related to intangible assets that are associated with a single function is included in Cost of sales, Selling, informational and administrative expenses and/or Research and development expenses, as appropriate. Total amortization expense for finite-lived intangible assets was $1.0 billion for the first quarter of 2015 and $1.1 billion for the first quarter of 2014.

Impairment Charges

For information about impairments of intangible assets, see Note 4.

For IPR&D assets, the risk of failure is significant and there can be no certainty that these assets ultimately will yield successful products. The nature of the biopharmaceutical business is high-risk and, as such, we expect that many of these IPR&D assets will become impaired and be written off at some time in the future.

B. Goodwill



The following table provides the components of and changes in the carrying amount of Goodwill:
(MILLIONS OF DOLLARS)	GIP			VOC			GEP			Total
Balance, December 31, 2014	$	13,032		$	11,398		$	17,639		$	42,069
Additions	—			37			—			37
Other^(a)	(69		)	(90		)	(94		)	(252		)
Balance, March 29, 2015	$	12,963		$	11,345		$	17,545		$	41,854


^(a)	Primarily reflects the impact of foreign exchange.

- 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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