This document addresses the main implications that the latest proposals on revenue recognition have for the pharma and life sciences industry. The new proposals are included in an exposure draft ‘Revenue from Contracts with Customers’ issued on 14 November 2011 (the ‘2011 ED’) by the IASB and FASB (the ‘boards’).
The 2011 ED incorporates a number of changes that were made in response to feedback received on the original proposals issued in June 2010 (the ‘2010 ED’). The supplement provided focuses only on those proposals that may have a significant impact on entities in the industry and it contrasts the 2011 ED with current practice under US GAAP and IFRS.
References to the ‘proposed model,’ the ‘proposed guidance,’ and the ‘proposed standard’ throughout this supplement refer to the 2011 ED unless otherwise indicated. The appendix sets out the key differences between the 2010 ED and the 2011 ED.