Interpreting disclosures regarding long-lived assets. Exhibit 9.7 presents a partial balance sheet for Amgen Inc., a creator and manufacturer of biotechnology pharmaceutical products, for December 31, 2006 and 2007.
a. Does Amgen likely recognize depreciation on the amount in the Construction in Progress account each year? Explain.
b. Amgen depreciates its assets using the straight-line method and recognized $593 million of depreciation during 2007. Compute the average total life and average age of Amgen€™s depreciable assets for 2007.
c. Did Amgen appear to dispose of any depreciable assets during 2007? Explain.
d. Describe the likely reasons that Amgen treats Developed Product Technology. Core Technology, Trade Name, and Acquired Technology Rights as intangibles subject to amortization. Consider each of these four items separately.

e. Amgen uses the straight-line amortization method and recognized $370 million of amortization for 2007. Compute the average total life and average age of Amgen€™s intangibles subject to amortization for 2007.
f. Describe the likely reasons why Developed Product Technology decreased from $3,077 million to $2,877 million during 2007, whereas the amounts for Core Technology and Trade Name remained the same.
g. Given the nature of Amgen€™s business, suggest the likely items that comprise Goodwill on the balance sheet.
h. The income statement of Amgen shows Interest Expense-Net. Based on the information in Exhibit 9.7, what item has Amgen likely netted against interestexpense?

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Partial Balance Sheet for Amgen Inc. (all dollar amounts in millions) (Problem 9.34) EXHIBIT 9.7 December 31, 2007 December 31, 2006 $ 9,235 S 294 Current Assets $11,712 $ 398 Land.... Buildings and Improvements 2,776 2,485 Equipment.... Construction in Progress Total Land, Buildings, and Equipment. Less Accumulated Depreciation.... Tatal Land, Buildings, and Equipment-Net.. 4,243 3,584 1,271 958 $ 8,688 $ 7,321 (2,767) $ 5,921 (2,283) 5 5,038 Intangibles Subject to Amortization: Developed Product Technology Core Technology. Trade Name Acquired Technology Rights $ 2,877 $ 3,077 1,348 1,348 190 190 350 Other Intangible Assets Total Intangibles Subject to Amortization. Less Accumulated Amortization..... Total Intangibles Subject to Amortization-Net . 454 335 $ 4,950 (1,208) $ 3,742 $ 5,219 (1,472) $ 3,747 Goodwill .. 11,302 10,495 $ 1,106 Other Assets 787 Total Assets $29,297 $33,788