Amgen 2010 Annual Report Download - page 131

Property, plant and equipment, net
Property, plant and equipment is recorded at historical cost, net of accumulated depreciation, amortization and,
if applicable, impairment charges. We review our property, plant and equipment assets for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Depreciation of buildings, equipment, furniture and fixtures is provided over their estimated useful lives on a
straight-line basis. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated
useful lives or lease terms. Useful lives by asset category are as follows:
Asset Category Years
Buildings and improvements........................................................ 10-40
Manufacturing equipment . . ........................................................ 5-12
Laboratory equipment ............................................................ 8-12
Furniture, fixtures and other assets ................................................... 3-15
See Note 12, Property, plant and equipment.
Intangible assets and goodwill
Finite-lived intangible assets are recorded at cost, net of accumulated amortization and, if applicable, impairment
charges. Amortization of finite-lived intangible assets is provided over their estimated useful lives on a straight-line
basis. We review our finite-lived intangible assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. See Note 13, Intangible assets.
The estimated fair values of in-process R&D projects acquired in a business combination which have not reached
technological feasibility and were acquired on and after January 1, 2009 are capitalized and accounted for as
indefinite-lived intangible assets subject to impairment testing until completion or abandonment of the project.
Capitalized in-process R&D projects are tested for impairment annually and whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. Upon successful completion of the project,
the capitalized amount is amortized over its estimated useful life. If a project is abandoned, all remaining capitalized
amounts are written-off immediately. The estimated fair values of in-process R&D projects acquired in a business
combination prior to January 1, 2009, which had not reached technological feasibility at the date of acquisition and
which did not have an alternative future use, were immediately expensed as required by accounting principles then in
effect.
Goodwill principally relates to our 2002 acquisition of Immunex Corporation (“Immunex”). We perform an
impairment test annually and whenever events or changes in circumstances indicate that the carrying amount of
goodwill may not be recoverable.
Convertible debt
The debt and equity components of convertible debt instruments that may be partially or wholly cash settled
(“cash settleable convertible notes”), including our 2011 Convertible Notes and 2013 Convertible Notes, are
bifurcated and accounted for separately. The debt component of cash settleable convertible notes, which excludes
the associated equity conversion option, is recorded at fair value as of the issuance date. The difference between the
amount allocated to the debt component and the proceeds received upon issuance of the debt is allocated to the
equity component and recorded in “Common stock and additional paid-in capital” in the Consolidated Balance
Sheets. The reduced or discounted carrying value of cash settleable convertible notes resulting from bifurcation is
subsequently accreted back to its principal amount through the recognition of non-cash interest expense. This
results in recognizing interest expense on the borrowing at an effective rate approximating what would have been
incurred had nonconvertible debt with otherwise similar terms been issued. See Note 15, Financing arrangements.
F-9
AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)