Amgen 2015 Annual Report Download - page 88

F-10
approval, the inability to bring a product to market and the introduction or advancement of competitors’ products could result in
partial or full impairment of the related intangible assets.
We perform an impairment test of goodwill annually and whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. To date, an impairment of goodwill has not been recorded. See Note 12, Goodwill and
other intangible assets.
Restricted investments
From September 2013 to May 2014, we had restricted investments on our Consolidated Balance Sheet that were owned by
ATL Holdings Limited (ATL Holdings), a wholly-owned subsidiary. ATL Holdings is an entity distinct from the Company and its
other subsidiaries, with separate assets and liabilities. Because certain third parties owned Class A preferred shares of ATL Holdings,
this entity was required to hold restricted investments, which were composed of interest-bearing securities, cash and related interest
receivable. On May 22, 2014, the Company repurchased all of the outstanding Class A preferred shares, and therefore, we
subsequently ceased to have restricted investments on our Consolidated Balance Sheet. See Note 14, Financing arrangements.
Contingencies
In the ordinary course of business, we are involved in various legal proceedings and other matters such as intellectual property
disputes, contractual disputes, governmental investigations and class action suits which are complex in nature and have outcomes
that are difficult to predict. (Certain of these proceedings are discussed in Note 18, Contingencies and commitments.) We record
accruals for loss contingencies to the extent that we conclude that it is probable that a liability has been incurred and the amount
of the related loss can be reasonably estimated. We consider all relevant factors when making assessments regarding these
contingencies.
While it is not possible to accurately predict or determine the eventual outcomes of these items, an adverse determination
in one or more of these items currently pending could have a material adverse effect on our consolidated results of operations,
financial position or cash flows.
Foreign currency translation
The net assets of international subsidiaries where the local currencies have been determined to be the functional currencies
are translated into U.S. dollars using current exchange rates. The U.S. dollar effects that arise from translating net assets of these
subsidiaries at changing rates are recognized in other comprehensive income. The earnings of these subsidiaries are translated into
U.S. dollars using average exchange rates.
Recent accounting pronouncements
In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance
for the recognition of revenue from contracts with customers to transfer goods and services. The new standard, as amended, is
effective for interim and annual periods beginning January 1, 2018, and may be adopted earlier, but not before January 1, 2017.
The new standard is required to be adopted using either a full retrospective or a modified retrospective approach. We are currently
evaluating the impact that this new standard will have on our consolidated financial statements.
In April 2015, the FASB issued a new accounting standard that amends the presentation for debt issuance costs. Upon adoption
of the standard, such costs will be presented on our Consolidated Balance Sheet as a direct deduction from the carrying amount
of the related debt liability and not as a deferred charge presented in Other assets on our Consolidated Balance Sheet. This new
standard is effective for interim and annual periods beginning on January 1, 2016, and is required to be retrospectively adopted.
We do not expect that adoption of this new standard will have a material impact on our consolidated financial statements.
In November 2015, the FASB issued a new accounting standard that amends the presentation of deferred income taxes on
our Consolidated Balance Sheet such that they are presented entirely as noncurrent assets and liabilities. As permitted by the
standard, we adopted the new presentation prospectively, beginning January 1, 2015. Consistent with our prospective adoption,
presentation of deferred income tax assets and liabilities as of December 31, 2014, was not restated. If they had been restated,
Other current assets and Long-term deferred tax liabilities would have been reduced by $660 million and $620 million, respectively,
and Other noncurrent assets would have increased by $40 million.