The life sciences ecosystem encompasses a wide array of entities that discover, develop, and manufacture health care products. Such entities include pharmaceutical manufacturers; biotechnology companies; medical device, diagnostic, and equipment manufacturers; and service companies such as drug distributors, contract research organizations, contract manufacturing organizations, 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 costs, acquisitions and divestitures, consolidation, contingencies, revenue recognition, income taxes, financial instruments, and financial statement presentation and disclosure. The 2023 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, 2023), and key differences between U.S. GAAP and IFRS® Accounting Standards. In addition, this Guide discusses (1) accounting and financial reporting considerations associated with the current macroeconomic and geopolitical environment and COVID-19 pandemic that apply specifically to the life sciences industry; (2) environmental, social, and governance matters that have become topics of increased focus; and (3) the potential impact of the Inflation Reduction Act.