Company: ABBV
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0001551152-25-000020
Chunk: 261

Company: AbbVie Inc.
Filing Date: 2025-02-14
Form: 10-K
Item: Item 3
Chunk 261
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 52-2022 (the Puerto Rico Act) allowing for a transition from a Puerto Rico excise tax levied on gross inventory purchases to an income-based tax beginning in 2023. The company completed the transition requirements of the Puerto Rico Act in 2022, resulting in the remeasurement of certain deferred tax assets and liabilities 

93     |  2024 Form 10-K

based on income tax rates at which they are expected to reverse in the future. The net tax benefit recognized in 2022 from the remeasurement of deferred taxes related to the Puerto Rico Act was $323 million.The Tax Cuts and Jobs Act (the Act) was signed into law in December 2017, resulting in significant changes to the U.S. corporate tax system, including a one-time transition tax on a mandatory deemed repatriation of earnings 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