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Goodwill and intangible assets (Tables)
 12 Months Ended
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.