For example, particular machinery is depreciated based on the estimated number of units the Company expected to produce. Both method are more complex compared to straight-line method of depreciation.
Considering that cost of an item will not have the same value compared at acquisition, an accounting method is created to realize an asset's valuation during the period. For property, plant and equipment, as well as goodwill and other intangible assets, the method used to bring down the asset's cost to its realizable value is through deprecation. Depreciation is a process of allocating its cost, excluding salvage value, over its useful life not exceeding the Company's estimated business life. Salvage value can be defined as the worth of an asset upon its maximum useful life of an asset.
As of December 31, 2001 and 2000, the property, plant and equipment cost and accumulated depreciation are as follows:
ICN Pharmaceuticals, Inc.
Property, Plant and Equipment, at cost
Accumulated Depreciation
Book Value
Meanwhile, "Goodwill and Other intangible" account, presented separately in the balance sheet under "Noncurrent Assets., is presented below. The details of the account as of December 31, 2001 and 2000 are as follows:
ICN Pharmaceuticals, Inc.
A in thousands)
Merck & Co., Inc. And Subsidiaries in thousands)
Goodwill and Intangibles, net
ICN and Merck initially recorded Property, Plant and Equipment at cost. Property, plant and equipment accounts are brought down to its book value using straight line depreciation for financial Statements reporting purposes. However, Merck uses accelerated depreciation for tax purposes. In this, there would be a reconciling item in Financial and Tax
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