AbbVie Inc. (ABBV)

Depreciation for property and equipment is recorded on a straight-line basis over the estimated useful lives of the assets. The estimated useful life for buildings ranges from 10 to 50 years. Buildings include leasehold improvements which are amortized over the life of the related facility lease (including any renewal periods, if appropriate) or the asset, whichever is shorter. The estimated useful life for equipment ranges from 2 to 25 years. Equipment includes certain computer software and software development costs incurred in connection with developing or obtaining software for internal use and is amortized over 3 to 10 years. Depreciation expense was $425 million in 2017, $425 million in 2016 and $417 million in 2015. Assets related to capital leases were insignificant at December 31, 2017 and 2016.

Source: AbbVie Inc., Annual Report

AbbVie Inc., Statement of Financial Position, Property, Plant and Equipment

USD $ in millions

Source: Based on data from AbbVie Inc. Annual Reports

Item	Description	The company
Land	Carrying amount as of the balance sheet date of real estate held for productive use. This excludes land held for sale.
Buildings	Carrying amount as of the balance sheet date of long-lived, depreciable assets that include building structures held for productive use including any addition, improvement, or renovation to the structure, such as interior masonry, interior flooring, electrical, and plumbing.	AbbVie Inc.'s buildings increased from 2015 to 2016 and from 2016 to 2017.
Equipment	Carrying amount as of the balance sheet date of long-lived, depreciable asset used in production process to produce goods and services.	AbbVie Inc.'s equipment increased from 2015 to 2016 and from 2016 to 2017.
Construction in progress	Carrying amount at the balance sheet date of long-lived asset under construction that include construction costs to date on capital projects that have not been completed and assets being constructed that are not ready to be placed into service.	AbbVie Inc.'s construction in progress increased from 2015 to 2016 and from 2016 to 2017.
Property and equipment, gross	Carrying amount at the balance sheet date for long-lived physical assets used in the normal conduct of business and not intended for resale. This can include land, physical structures, machinery, vehicles, furniture, computer equipment, construction in progress, and similar items. Amount does not include depreciation.	AbbVie Inc.'s property and equipment, gross increased from 2015 to 2016 and from 2016 to 2017.
Property and equipment, net	Tangible assets that are held by an entity for use in the production or supply of goods and services, for rental to others, or for administrative purposes and that are expected to provide economic benefit for more than one year; net of accumulated depreciation. Examples include land, buildings, and production equipment.	AbbVie Inc.'s property and equipment, net increased from 2015 to 2016 and from 2016 to 2017.

AbbVie Inc., Property, Plant and Equipment Ratios

Ratio	Description	The company
Average age	As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company's fixed asset base is old or new. Newer assets are likely to be more efficient.	AbbVie Inc.'s average age of depreciable property, plant and equipment deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017.
Estimated total useful life	Over longer time periods, this ratio is a useful measure of company's depreciation policy and can be used for comparisons with competitors.	AbbVie Inc.'s estimated total useful life of depreciable property, plant and equipment increased from 2015 to 2016 and from 2016 to 2017.
Estimated time elapsed since purchase	The approximate age in years of a company's fixed assets. Useful for comparison purposes.	AbbVie Inc.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2015 to 2016 and from 2016 to 2017.
Estimated remaining life		AbbVie Inc.'s estimated remaining life of depreciable property, plant and equipment declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.

2017 Calculations

Ratio	Description	The company
Average age	As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company's fixed asset base is old or new. Newer assets are likely to be more efficient.	AbbVie Inc.'s average age of depreciable property, plant and equipment deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017.

2017 Calculations

Ratio	Description	The company
Estimated total useful life	Over longer time periods, this ratio is a useful measure of company's depreciation policy and can be used for comparisons with competitors.	AbbVie Inc.'s estimated total useful life of depreciable property, plant and equipment increased from 2015 to 2016 and from 2016 to 2017.

2017 Calculations

Ratio	Description	The company
Estimated time elapsed since purchase	The approximate age in years of a company's fixed assets. Useful for comparison purposes.	AbbVie Inc.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2015 to 2016 and from 2016 to 2017.

2017 Calculations

Ratio	Description	The company
Estimated remaining life		AbbVie Inc.'s estimated remaining life of depreciable property, plant and equipment declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.