Company: ABBV
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0001551152-25-000020
Chunk: 358

Company: AbbVie Inc.
Filing Date: 2025-02-14
Form: 10-K
Item: Item 8
Chunk 358
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 of certain foreign subsidiaries that were previously untaxed. The Act also created a U.S. global minimum tax on certain foreign sourced earnings. The company’s accounting policy for the minimum tax on foreign sourced earnings is to report the tax effects on the basis that the minimum tax will be recognized in tax expense in the year it is incurred as a period expense.Deferred Tax Assets and Liabilitiesas of December 31 (in millions)20242023Deferred tax assetsCompensation and employee benefits$215 $519 Accruals and reserves1,253 1,113 Chargebacks and rebates1,354 1,431 Advance payments66 298 Net operating losses and other carryforwards15,815 14,316 Other2,156 2,259 Total deferred tax assets20,859 19,936 Valuation allowances(14,823)(13,478)Total net deferred tax assets6,036 6,458 Deferred tax liabilitiesExcess of book basis over tax basis of intangible assets(1,969)(1,535)Excess of book basis over tax basis in investments(302)(374)Other(718)(746)Total deferred tax liabilities(2,989)(2,655)Net deferred tax assets $3,047 $3,803 The decrease in deferred tax assets is primarily related to a decrease in compensation, employee benefits and advance payments. The increase in deferred tax liabilities is primarily due to the acquisition of Cerevel Therapeutics and ImmunoGen in which the company recorded the excess of book basis over tax basis of intangible assets, offset by amortization and impairment of intangible assets. The company had valuation allowances of $14.8 billion as of December 31, 2024 and $13.5 billion as of December 31, 2023. These were principally related to foreign and state net operating losses and other credit carryforwards that are not expected to be realized.The company incurred carryforward deductions in a foreign jurisdiction where realization of the future income tax benefit was, in previous reporting periods, considered so remote that the income tax benefit was not recognized as a deferred tax asset. In 2024, the company concluded that the future income tax benefit of the carryforward balances is no longer remote and therefore, a deferred tax asset was recognized. The company also recognized an offsetting valuation allowance, resulting in no net impact to deferred tax assets as such carryforward balances are not expected to be realized in the foreseeable future.As of