Health Tech Industry Accounting Guide
September 2025
We are pleased to present the sixth
edition of Deloitte’s Health Tech Industry Accounting Guide. The convergence
of the technology and health care/life sciences industries has caused unique
challenges for management within these sectors. This publication is aimed at
identifying and providing guidance on the most difficult technical accounting issues
that are encountered in these sectors.
Topics discussed include the
following:
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Industry trends and insights — Considerations related to investment and funding trends in the mental health and wellness (MHW) market.
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Capitalized software (ASC 350-40 and ASC 985-20) — Analysis of (1) internal-use versus external-use software; (2) capitalization of internal-use software costs on the basis of development stages; (3) cloud computing arrangements; (4) agile software development; and (4) matters related to the accounting for generative artificial intelligence (AI) software applications used as internal-use software, including (a) foundation models, (b) data acquisition costs, and (c) training costs.
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Revenue recognition (ASC 606) — Exploration of (1) the five-step revenue recognition model, (2) contract modifications, (3) gross versus net revenue recognition, (4) U.S. federal income tax considerations and considerations related to accounting for income taxes, (5) cloud conversion or switching rights, and (6) conversion of perpetual software licenses to term-based software licenses.
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Costs of obtaining a contract (ASC 340-40) — Guidance on identifying incremental costs that are capitalized, such as sales commissions and fringe benefits, with practical examples.