The life sciences ecosystem encompasses a vast array of entities that discover, develop, and manufacture health care products. Such entities include pharmaceutical manufacturers; biotechnology companies; medical device, diagnostic, and medical equipment manufacturers; and service companies such as drug distributors, contract research organizations (CROs), contract manufacturing organizations (CMOs), and health technology companies.
Finance and accounting professionals in the industry face complex issues and must exercise significant judgment in applying existing rules to matters such as research and development (R&D) costs, acquisitions and divestitures, consolidation, contingencies, revenue recognition, income taxes, financial instruments, and financial statement presentation and disclosure. The 2020 edition of Deloitte’s Life Sciences Industry Accounting Guide (the “Guide”) addresses these and other relevant topics affecting the industry this year. It includes interpretive guidance, illustrative examples, recent standard-setting developments (through February 28, 2020), and key differences between U.S. GAAP and IFRS® Standards. In addition, this Guide discusses the outlook for the life sciences industry in 2020. Further, while many of the key accounting and financial reporting considerations stemming from the coronavirus disease 2019 (COVID-19) outbreak are related to topics addressed in this Guide, we encourage you to review Deloitte’s March 25, 2020, Financial Reporting Alert, which discusses accounting and financial reporting considerations associated with COVID-19 that are broadly applicable as well as those that apply specifically to the life sciences industry.