Amgen 2009 Annual Report Download - page 130

AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Available-for-sale securities
We consider our marketable security investment portfolio and marketable equity investments
available-for-sale and, accordingly, these investments are recorded at fair value with unrealized gains and losses
generally recorded in other comprehensive income. See Note 11, “Available-for-sale securities.”
Inventories
Inventories are stated at the lower of cost or market. Cost, which includes amounts related to materials, la-
bor and overhead, is determined in a manner which approximates the first-in, first-out (“FIFO”) method. The
Company capitalizes inventories produced in preparation for product launches when the related product candi-
dates are considered to have a high probability of regulatory approval and the related costs are expected to be
recoverable through the commercialization of the product. See Note 12, “Inventories.”
Property, plant and equipment, net
Property, plant and equipment is recorded at cost, net of accumulated depreciation and amortization. We re-
view 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 13, “Property, plant and equipment.”
Intangible assets and goodwill
Intangible assets other than goodwill are recorded at cost, net of accumulated amortization. Amortization of
intangible assets is provided over their estimated useful lives on a straight-line basis. We review our intangible
assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. See Note 14, “Intangible assets.”
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.
Derivative instruments
Effective January 1, 2009, we adopted a new accounting standard that requires additional disclosures about
our derivative instruments and hedging activities. This standard requires that the objectives for using derivative
instruments be disclosed to better convey the purpose of their use in terms of the risks that we are intending to
manage. This standard also requires disclosure of how derivatives and related hedged items affect our financial
statements. The adoption of this standard did not have a material impact on our consolidated results of oper-
ations, financial position or cash flows. See Note 19, “Derivative instruments.”
Subsequent events
We have evaluated subsequent events through the date of issuance of our financial statements in this
Form 10-K.
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