Abbott Laboratories, based in Chicago, Illinois, is a global pharmaceuticals and health care conglomerate. They were originally known for developing the first ever HIV blood screening test in 1985. Created in 1888 by Dr. Wallace Calvin Abbott, the company has grown to a $35 billion revenue BioPharma powerhouse. One of their go-to growth moves is acquisition. These acquisitions have added to their portfolio such brand names as Ensure, EAS and Similac just to name a few. In 2009, they continued this trend and broke into the vision care market by acquiring Advance Medical Optics Corporation for $1.4 billion on February 26, 2009. According to Abbott's 2009 10-K filed with the SEC, "Abbott acquired AMO to take advantage of increasing demand for vision care technologies due to population growth and demographic shifts and AMO's premier position in its field. " (SEC, 2010, p. 36) .

             1) As it was 2009, Abbott used the acquisition method of accounting for business combinations. As stated in Note 11 of their 10-k, "On January 1, 2009, Abbott adopted the provisions of SFAS No. 141 (revised 2007), "Business Combinations," as codified in FASB ASC No. 805, "Business Combinations." Under ASC No. 805 " (SEC, 2010). .

             According to the revised statement, the acquirer is required to now recognize contingent liabilities at fair value, to expense direct combination costs and to now recognize in-progress R&D as an asset until it is discontinued or approved by the acquiring company. (FASB, 2007) .

             The original FASB 141 posited that contingent liabilities can just be ignored, direct combination costs adjusted goodwill as part of the consideration paid, and IPRD was immediately expensed. As will be mentioned in subsequent answers, they consistently used the tactics put forth by the revised FASB statement. .

             2) The calculation for goodwill along with the allocations for the fair valued assets acquired were:.

             I. Acquired intangible assets, including established customer relationships, developed.