Life Sciences Industry Accounting Guide
March 2024
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 (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 2024 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 and rulemaking developments
(through March 8, 2024), 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 that apply specifically to the life sciences industry; (2)
environmental, social, and governance matters that have become topics of increased
focus; and (3) the impact of the Inflation Reduction Act of 2022 (IRA).