Life Sciences Industry Accounting Guide
March 2023
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.