SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2021

Summary of activity in allowance for credit losses

The activity in the allowance for credit losses for trade receivables for the years 2021, 2020 and 2019 is as follows.


(in millions)	2021		2020		2019
Balance, beginning of period	$	39	$	48	$	47
Retrospective effect of application of new accounting standard	—		1		—
Provision	(2)		2		10
Write-offs	(3)		(12)		(10)
Recoveries	2		3		1
Foreign exchange and other	(1)		(3)		—
Balance, end of period	$	35	$	39	$	48

Schedule of estimated useful lives of property, plant and equipment

Depreciation is calculated using the straight-line method, commencing when the assets become available for productive use, based on the following estimated useful lives:


Land improvements						15 - 30 years
Buildings and improvements						Up to 40 years
Machinery and equipment						3 - 20 years
Other equipment						3 - 10 years
Equipment on operating lease						Up to 5 years
Leasehold improvements						Lesser of term of lease or 10 years

Schedule of estimated useful lives of intangible assets

Amortization is calculated primarily using the straight-line method based on the following estimated useful lives:


Product brands						2 - 20 years
Corporate brands						9 - 20 years
Product rights/patents						4 - 15 years
Partner relationships						7 - 9 years
Out-licensed technology and other						8 - 9 years

Summary of variable consideration provisions

The following table presents the activity and ending balances of the Company’s variable consideration provisions the years 2021 and 2020.


(in millions)	Discounts and Allowances		Returns		Rebates		Chargebacks		Distribution Fees		Total
Reserve balance, January 1, 2020	$	182	$	691	$	927	$	168	$	82	$	2,050
Current period provision	621		120		2,174		1,925		196		5,036
Payments and credits	(613)		(236)		(2,322)		(1,909)		(193)		(5,273)
Reserve balance, December 31, 2020	190		575		779		184		85		1,813
Current period provision	625		131		2,462		1,999		211		5,428
Payments and credits	(593)		(224)		(2,297)		(2,013)		(251)		(5,378)
Reserve balance, December 31, 2021	$	222	$	482	$	944	$	170	$	45	$	1,863