Life Sciences Industry Accounting Guide
March 2020
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.