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Goodwill and intangible assets (Tables) | 12 Months Ended
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Dec. 31, 2020
Disclosure of detailed information about intangible assets [abstract] |
Movements of goodwill and intangible assets | The following table summarizes the movements of goodwill and intangible assets in 2020:
|  | Goodwill |  | Intangible assets other than goodwill |
(USD millions) |  | Total |  | In-process research and development |  | Technologies |  | Currently marketed products |  | Other intangible assets |  | Total |
Cost |  |  |  |  |  |  |  |  |  |  |  |  |
January 1, 2020 |  | 26 825 |  | 7 429 |  | 884 |  | 43 548 |  | 1 558 |  | 53 419 |
Cost of assets reclassified out of assets of disposal group held for sale 1 |  |  |  | 10 |  | 276 |  | 1 112 |  | 2 |  | 1 400 |
Impact of acquisitions of businesses |  | 2 580 |  | 8 600 |  |  |  | 196 |  | 218 |  | 9 014 |
Reclassifications 2 |  |  |  | – 9 272 |  | – 2 |  | 9 274 |  |  |  |  |
Additions 3 |  |  |  | 339 |  |  |  | 674 |  | 412 |  | 1 425 |
Disposals and derecognitions 4 |  |  |  | – 421 |  | – 101 |  | – 39 |  | – 11 |  | – 572 |
Currency translation effects |  | 916 |  | 208 |  | 58 |  | 2 568 |  | 205 |  | 3 039 |
December 31, 2020 |  | 30 321 |  | 6 893 |  | 1 115 |  | 57 333 |  | 2 384 |  | 67 725 |
Accumulated amortization |  |  |  |  |  |  |  |  |  |  |  |  |
January 1, 2020 |  | – 301 |  | – 2 005 |  | – 721 |  | – 20 969 |  | – 937 |  | – 24 632 |
Accumulated amortization on assets reclassified out of assets of disposal group held for sale 1 |  |  |  | – 2 |  | – 107 |  | – 816 |  |  |  | – 925 |
Amortization charge 5 |  |  |  |  |  | – 72 |  | – 3 215 |  | – 175 |  | – 3 462 |
Accumulated amortization on disposals and derecognitions 4 |  |  |  | 421 |  | 101 |  | 39 |  | 6 |  | 567 |
Impairment charge 6 |  |  |  | – 515 |  | – 40 |  | – 338 |  | – 21 |  | – 914 |
Currency translation effects |  | – 21 |  | – 92 |  | – 46 |  | – 1 267 |  | – 145 |  | – 1 550 |
December 31, 2020 |  | – 322 |  | – 2 193 |  | – 885 |  | – 26 566 |  | – 1 272 |  | – 30 916 |
Net book value at December 31, 2020 |  | 29 999 |  | 4 700 |  | 230 |  | 30 767 |  | 1 112 |  | 36 809 |
1 Note 2 provides additional disclosures related to the reclassification out of assets of disposal group held for sale as of March 31, 2020.
2 Reclassifications between various asset categories as a result of product launches of acquired in-process research and development and completion of software development
3 No addition for the disposal group held for sale for the period from January 1, 2020, to March 31, 2020
4 Derecognition of assets that are no longer being used or developed and are not considered to have a significant disposal value or other alternative use
5 Amortization charge includes USD 102 million (USD 73 million for currently marketed products and USD 29 million for technologies), representing the cumulative amount of amortization charge for the disposal group held for sale for intangible assets from the date of reclassification to held for sale, September 6, 2018, to March 31, 2020, the date of reclassification out of assets of disposal group held for sale. See Note 2 for further details.
6 Impairment charge includes USD 42 million on currently marketed products that were previously classified within assets of disposal group held for sale. See Note 2 for further details.
The following table summarizes the movements of goodwill and intangible assets in 2019:
|  | Goodwill |  | Intangible assets other than goodwill |
(USD millions) |  | Total |  | In-process research and development |  | Alcon brand name |  | Technologies |  | Currently marketed products |  | Marketing know-how |  | Other intangible assets |  | Total |
Cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
January 1, 2019 |  | 35 700 |  | 16 167 |  | 2 980 |  | 6 253 |  | 35 412 |  | 5 960 |  | 2 253 |  | 69 025 |
Cost of assets related to discontinued operations 1 |  | – 9 000 |  | – 249 |  | – 2 980 |  | – 5 369 |  | – 4 440 |  | – 5 960 |  | – 572 |  | – 19 570 |
Cost of assets related to disposal group held for sale, net 2 |  |  |  | – 1 |  |  |  |  |  | 4 |  |  |  |  |  | 3 |
Impact of acquisitions of businesses |  | 186 |  | 342 |  |  |  |  |  | 3 550 |  |  |  | 22 |  | 3 914 |
Reclassifications 3 |  |  |  | – 9 069 |  |  |  |  |  | 9 069 |  |  |  |  |  |  |
Additions 4 |  |  |  | 265 |  |  |  |  |  | 243 |  |  |  | 259 |  | 767 |
Disposals and derecognitions 5 |  |  |  | – 75 |  |  |  |  |  | – 544 |  |  |  | – 436 |  | – 1 055 |
Currency translation effects |  | – 61 |  | 49 |  |  |  |  |  | 254 |  |  |  | 32 |  | 335 |
December 31, 2019 |  | 26 825 |  | 7 429 |  |  |  | 884 |  | 43 548 |  |  |  | 1 558 |  | 53 419 |
Accumulated amortization |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
January 1, 2019 |  | – 406 |  | – 1 120 |  |  |  | – 4 758 |  | – 21 218 |  | – 1 906 |  | – 1 304 |  | – 30 306 |
Accumulated amortization on assets related to discontinued operations 1 |  | 101 |  | 3 |  |  |  | 4 184 |  | 2 592 |  | 1 906 |  | 128 |  | 8 813 |
Amortization charge 6 |  |  |  |  |  |  |  | – 42 |  | – 2 657 |  |  |  | – 137 |  | – 2 836 |
Accumulated amortization on disposals and derecognitions 5 |  |  |  | 70 |  |  |  |  |  | 494 |  |  |  | 419 |  | 983 |
Impairment charge 6 |  |  |  | – 984 |  |  |  | – 105 |  | – 54 |  |  |  | – 32 |  | – 1 175 |
Reversal of impairment charge |  |  |  | 37 |  |  |  |  |  |  |  |  |  |  |  | 37 |
Currency translation effects |  | 4 |  | – 11 |  |  |  |  |  | – 126 |  |  |  | – 11 |  | – 148 |
December 31, 2019 |  | – 301 |  | – 2 005 |  |  |  | – 721 |  | – 20 969 |  |  |  | – 937 |  | – 24 632 |
Net book value at December 31, 2019 |  | 26 524 |  | 5 424 |  |  |  | 163 |  | 22 579 |  |  |  | 621 |  | 28 787 |
1 Represents the cost of assets and accumulated amortization at January 1, 2019, related to the Alcon business reported as discontinued operations. Notes 1, 2 and 30 provide information related to discontinued operations.
2 Note 2 provides additional disclosures related to assets of disposal group held for sale.
3 Reclassifications between various asset categories as a result of product launches of acquired in-process research and development and completion of software development
4 No addition in the disposal group held for sale for the period from January 1, 2019, to December 31, 2019
5 Derecognition of assets that are no longer being used or developed and are not considered to have a significant disposal value or other alternative use
6 No amortization or impairment charges related to the disposal group held for sale for the period from January 1, 2019, to December 31, 2019.
Allocation of net book values of goodwill and intangible assets by reporting segment |
|  | Goodwill |  | Intangible assets other than goodwill |
(USD millions) |  | Total |  | In-process research and development |  | Technologies |  | Currently marketed products |  | Other intangible assets |  | Total |
Innovative Medicines |  | 21 718 |  | 4 548 |  | 3 |  | 29 645 |  | 925 |  | 35 121 |
Sandoz |  | 8 274 |  | 152 |  | 227 |  | 1 122 |  | 42 |  | 1 543 |
Corporate |  | 7 |  |  |  |  |  |  |  | 145 |  | 145 |
Net book value at December 31, 2020 |  | 29 999 |  | 4 700 |  | 230 |  | 30 767 |  | 1 112 |  | 36 809 |
The following table summarizes the allocation of the net book values of goodwill and intangible assets by reporting segment at December 31, 2019:
|  | Goodwill |  | Intangible assets other than goodwill |
(USD millions) |  | Total |  | In-process research and development |  | Technologies |  | Currently marketed products |  | Other intangible assets |  | Total |
Innovative Medicines |  | 18 750 |  | 5 339 |  | 7 |  | 21 720 |  | 520 |  | 27 586 |
Sandoz |  | 7 767 |  | 85 |  | 156 |  | 859 |  | 25 |  | 1 125 |
Corporate |  | 7 |  |  |  |  |  |  |  | 76 |  | 76 |
Net book value at December 31, 2019 |  | 26 524 |  | 5 424 |  | 163 |  | 22 579 |  | 621 |  | 28 787 |
Assumptions used in the calculation of valuation |
(As a percentage) |  | Innovative Medicines |  | Sandoz |
Terminal growth rate |  | 1.5 |  | 1.5 |
Discount rate (post-tax) |  | 6.5 |  | 6.5 |
Intangible asset impairment charges |
(USD millions) |  | 2020 |  | 2019 |  | 2018 |
Innovative Medicines 1 |  | – 768 |  | – 669 |  | – 592 |
Sandoz 2 |  | – 141 |  | – 506 |  | – 249 |
Corporate |  | – 5 |  |  |  |  |
Total |  | – 914 |  | – 1 175 |  | – 841 |
1 2020 includes an impairment of USD 485 million related to the write-down of IPR&D related to cessation of clinical development program ZPL389 for atopic dermatitis and USD 181 million related to a partial write-down of the Votrient currently marketed product. 2019 includes an impairment of USD 416 million related to the write-down of IPR&D related to cessation of clinical development program EMA401 and a USD 108 million write-down related to the cessation of clinical development program for MOR106 for atopic dermatitis. 2018 includes an impairment of USD 400 million related to a partial write-down of the Votrient currently marketed product.
2 2019 includes an impairment of USD 442 million related to the write-down of IPR&D related to the discontinuation of the generic Advair® development program. 2018 includes impairments of USD 220 million related to the write-down of the allocated goodwill (USD 183 million) and the currently marketed products (USD 37 million) related to the retained Sandoz US dermatology business and generic US oral solids portfolio. See Note 2.

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