SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2022

Summary of activity in allowance for credit losses

The activity in the allowance for credit losses for trade receivables was as follows:


(in millions)	2022		2021		2020
Balance, beginning of period	$	35	$	39	$	48
Retrospective effect of application of new accounting standard	—		—		1
Provision for expected credit losses	5		(2)		2
Write-offs charged against the allowance	(6)		(3)		(12)
Recoveries of amounts previously written off	2		2		3
Foreign exchange and other	(3)		(1)		(3)
Balance, end of period	$	33	$	35	$	39

Schedule of estimated useful lives of property, plant and equipment

Depreciation is calculated using the straight-line method, commencing when the assets become available for productive use, based on the following estimated useful lives:


Land improvements						15 - 30 years
Buildings and improvements						Up to 40 years
Machinery and equipment						3 - 20 years
Other equipment						3 - 10 years
Equipment on operating lease						Up to 5 years
Leasehold improvements						Lesser of term of lease or 10 years

Schedule of estimated useful lives of intangible assets

Amortization is calculated primarily using the straight-line method based on the following estimated useful lives:


Product brands						1 - 20 years
Corporate brands						9 - 20 years
Product rights/patents						4 - 15 years
Partner relationships						7 - 9 years
Out-licensed technology and other						8 - 9 years

Summary of variable consideration provisions

The following table presents the activity and ending balances of the Company’s variable consideration provisions the years 2022 and 2021.


(in millions)	Discounts and Allowances		Returns		Rebates		Chargebacks		Distribution Fees		Total
Reserve balance, January 1, 2021	$	190	$	575	$	779	$	184	$	85	$	1,813
Current period provision	625		131		2,462		1,999		211		5,428
Payments and credits	(593)		(224)		(2,297)		(2,013)		(251)		(5,378)
Reserve balance, December 31, 2021	222		482		944		170		45		1,863
Current period provision	571		131		2,587		2,064		218		5,571
Payments and credits	(605)		(186)		(2,508)		(2,038)		(187)		(5,524)
Reserve balance, December 31, 2022	$	188	$	427	$	1,023	$	196	$	76	$	1,910