v3.20.4
Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Intangible Assets
Goodwill
The following table summarizes the changes in the carrying amount of goodwill:
(in millions)
Balance as of December 31, 2018$15,663 
Foreign currency translation adjustments(59)
Balance as of December 31, 201915,604 
Additions(a)
17,008 
Foreign currency translation adjustments512 
Balance as of December 31, 2020$33,124 
(a)Goodwill additions related to the acquisition of Allergan in the second quarter of 2020 and the acquisition of Luminera in the fourth quarter of 2020 (see Note 5).
The company performs its annual goodwill impairment assessment in the third quarter, or earlier if impairment indicators exist. As of December 31, 2020, there were no accumulated goodwill impairment losses.
Intangible Assets, Net
The following table summarizes intangible assets:
20202019
as of December 31 (in millions)Gross
carrying
amount		Accumulated
amortization		Net
carrying
amount		Gross
carrying
amount		Accumulated
amortization		Net
carrying
amount
Definite-lived intangible assets
Developed product rights$87,707 $(11,620)$76,087 $19,547 $(6,405)$13,142 
License agreements7,828 (2,916)4,912 7,798 (2,291)5,507 
Total definite-lived intangible assets95,535 (14,536)80,999 27,345 (8,696)18,649 
Indefinite-lived research and development1,877 — 1,877 — — — 
Total intangible assets, net$97,412 $(14,536)$82,876 $27,345 $(8,696)$18,649 
Definite-Lived Intangible Assets
The increase in definite-lived intangible assets during 2020 was primarily due to the acquisition of Allergan in the second quarter of 2020. The intangible assets will be amortized using the estimated pattern of economic benefit. Refer to Note 5 for additional information regarding this acquisition.
Definite-lived intangible assets are amortized over their estimated useful lives, which range between 1 to 16 years with an average of 12 years for developed product rights and 11 years for license agreements. Amortization expense was $5.8 billion in 2020, $1.6 billion in 2019 and $1.3 billion in 2018 and was included in cost of products sold in the consolidated statements of earnings. The anticipated annual amortization expense for definite-lived intangible assets recorded as of December 31, 2020 is as follows:
(in billions)20212022202320242025
Anticipated annual amortization expense$7.7 $7.2 $7.5 $8.0 $8.4 
No definite-lived intangible asset impairment charges were recorded in 2020, 2019 or 2018.
Indefinite-Lived Intangible Assets
Indefinite-lived intangible assets represent acquired IPR&D associated with products that have not yet received regulatory approval. The increase in indefinite-lived research and development assets during 2020 was due to the acquisition of Allergan in the second quarter of 2020 and the acquisition of Luminera in the fourth quarter of 2020. Refer to Note 5 for additional information regarding these acquisitions.
The company performs its annual impairment assessment of indefinite-lived intangible assets in the third quarter, or earlier if impairment indicators exist. No indefinite-lived intangible asset impairment charges were recorded in 2020. In 2019, following the announcement of the decision to terminate the rovalpituzumab tesirine (Rova-T) R&D program, the company recorded an impairment charge of $1.0 billion which represented the remaining value of the IPR&D acquired as part of the 2016 Stemcentrx acquisition. This termination was subsequent to the decision to stop enrollment for the TAHOE trial, which resulted in an impairment charge of $5.1 billion in 2018. These impairment charges were recorded to R&D expense in the consolidated statements of earnings in 2019 and 2018.