United states securities and exchange commission

Table of Contents
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
F- 17
Acquired In-process Research and Development (IPR&D)
Acquired IPR&D represents the fair value assigned to research and development assets that have not reached 
technological feasibility. The value assigned to acquired IPR&D is determined by estimating the costs to develop the 
acquired technology into commercially viable products, estimating the resulting revenues from the projects and 
discounting the net cash flows to present value. The revenues and costs projections used to value acquired IPR&D 
are, as applicable, reduced based on the probability of success of developing a new drug. Additionally, the 
projections consider the relevant market sizes and growth factors, expected trends in technology and the nature and 
expected timing of new product introductions by us and our competitors. The rates utilized to discount the net cash 
flows to their present value are commensurate with the stage of development of the projects and uncertainties in the 
economic estimates used in the projections. Upon the acquisition of IPR&D, we complete an assessment of whether 
our acquisition constitutes the purchase of a single asset or a group of assets. We consider multiple factors in this 
assessment, including the nature of the technology acquired, the presence or absence of separate cash flows, the 
development process and stage of completion, quantitative significance and our rationale for entering into the 
transaction.
If we acquire a business as defined under applicable accounting standards, then the acquired IPR&D is 
capitalized as an intangible asset. If we acquire an asset or group of assets that do not meet the definition of a 
business, then the acquired IPR&D is expensed on its acquisition date. Future costs to develop these assets are 
recorded to research and development expense as they are incurred. 
When performing our impairment assessment, we calculate the fair value using the same methodology as 
described above. If the carrying value of our acquired IPR&D exceeds its fair value, then the intangible asset is 
written-down to its fair value. Certain IPR&D programs have a fair value that is not significantly in excess of carrying 
value, including treatments for forms of neuropathic pain, such as trigeminal neuralgia (TGN). Such programs could 
become impaired if assumptions used in determining the fair value change. Impairments are recorded as 
amortization of acquired intangible assets in our consolidated statements of income.
Goodwill
Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible 
and intangible net assets when accounted for using the purchase method of accounting. Goodwill is not amortized, 
but reviewed for impairment. Goodwill is reviewed annually, as of October 31, and whenever events or changes in 
circumstances indicate that the carrying value of the goodwill might not be recoverable.
We compare the fair value of our reporting unit to its carrying value. If the carrying value of the net assets 
assigned to the reporting unit exceeds the fair value of our reporting unit, we would record an impairment loss equal 
to the difference. As described in Note 25, Segment Information, to these consolidated financial statements, we 
operate in one operating segment which we consider our only reporting unit.
Impairment of Long-Lived Assets
Long-lived assets to be held and used, including property, plant and equipment and definite-lived intangible 
assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount 
of the assets or asset group may not be recoverable.
Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the 
use of the asset and its eventual disposition. In the event that such cash flows are not expected to be sufficient to 
recover the carrying amount of the assets, the assets are written-down to their fair values. Long-lived assets to be 
disposed of are carried at fair value less costs to sell.

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Table of Contents
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
F- 18
Contingent Consideration
The consideration for our acquisitions often includes future payments that are contingent upon the occurrence 
of a particular event or events. For acquisitions completed before January 1, 2009, we record contingent 
consideration resulting from a business combination when the contingency is resolved. For acquisitions that qualify 
as business combinations completed after January 1, 2009, we record an obligation for such contingent payments at 
fair value on the acquisition date. We estimate the fair value of contingent consideration obligations through 
valuation models that incorporate probability-adjusted assumptions related to the achievement of the milestones 
and thus likelihood of making related payments. We revalue our contingent consideration obligations each reporting 
period. Changes in the fair value of our contingent consideration obligations are recognized in our consolidated 
statements of income. Changes in the fair value of the contingent consideration obligations can result from changes 
to one or multiple inputs, including adjustments to the discount rates, changes in the amount or timing of expected 
expenditures associated with product development, changes in the amount or timing of cash flows and reserves 
associated with products upon commercialization, changes in the assumed achievement or timing of any cumulative 
sales-based and development milestones, changes in the probability of certain clinical events and changes in the 
assumed probability associated with regulatory approval. 
Discount rates in our valuation models represent a measure of the credit risk associated with settling the 
liability. The period over which we discount our contingent obligations is based on the current development stage of 
the product candidates, our specific development plan for that product candidate adjusted for the probability of 
completing the development step, and when the contingent payments would be triggered. In estimating the 
probability of success, we utilize data regarding similar milestone events from several sources, including industry 
studies and our own experience. These fair value measurements are based on significant inputs not observable in 
the market. Significant judgment is employed in determining the appropriateness of these assumptions as of the 
acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact 
on the amount of contingent consideration expense we record in any given period.
Derivative Instruments and Hedging Activities
We recognize all derivative instruments as either assets or liabilities at fair value in our consolidated balance 
sheets. Changes in the fair value of derivatives are recorded each period in current earnings or accumulated other 
comprehensive income (loss), depending on whether a derivative is designated as part of a hedge transaction and, if 
so, the type of hedge transaction. We classify the cash flows from these instruments in the same category as the 
cash flows from the hedged items. We do not hold or issue derivative instruments for trading or speculative 
purposes.
We assess, both at inception and on an ongoing basis, whether the derivatives that are used in hedging 
transactions are highly effective in offsetting the changes in cash flows or fair values of the hedged items. We also 
assess hedge ineffectiveness on a quarterly basis and record the gain or loss related to the ineffective portion to 
current earnings. If we determine that a forecasted transaction is no longer probable of occurring, we discontinue 
hedge accounting for the affected portion of the hedge instrument, and any related unrealized gain or loss on the 
contract is recognized in current earnings.
Translation of Foreign Currencies
The functional currency for most of our foreign subsidiaries is their local currency. For our non-U.S. subsidiaries 
that transact in a functional currency other than the U.S. dollar, assets and liabilities are translated at current rates 
of exchange at the balance sheet date. Income and expense items are translated at the average foreign currency 
exchange rates for the period. Adjustments resulting from the translation of the financial statements of our foreign 
operations into U.S. dollars are excluded from the determination of net income and are recorded in accumulated 
other comprehensive income, a separate component of equity. For subsidiaries where the functional currency of the 
assets and liabilities differ from the local currency, non-monetary assets and liabilities are translated at the rate of 
exchange in effect on the date assets were acquired while monetary assets and liabilities are translated at current 
rates of exchange as of the balance sheet date. Income and expense items are translated at the average foreign 
currency rates for the period. Translation adjustments of these subsidiaries are included in other income (expense), 
net in our consolidated statements of income.

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