IFRS – Issues and Solutions for the Pharmaceuticals and Life Sciences Industries

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One of the biggest problems life science and biomedical companies face in their efforts to develop further is a lack of adequate and reliable long-term financing. At the same time, the pharmaceutical industry has found itself having to deal with a number of complex issues connected with the loss of patent protection and the need to adapt to new ways of carrying out research. Often the best solution to these problems has been to form a partnership with another company.

Each agreement is unique and may contain extremely complex clauses. While both the US Generally Accepted Accounting Principles (US GAAP) and the International Financial Reporting Standards (IFRS) provide guidance on revenue recognition, as yet there is no specific industry guidance as to how these agreements should be accounted for.

This third publication of IFRS Issues and Solutions for the Pharmaceutical and Life Sciences Industries has been prepared in order to stimulate a discussion of these issues, and represents the first step in trying to establish a common platform or framework.

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Vol I & II UPDATES

This report is an update of the 2004 and 2005 editions (volumes 1 and 2) of IFRS Issues and Solutions for the Pharmaceutical Industry. This new edition clarifies various grey areas in terms of definition and interpretation arising from the implementation of the standards in 2005.

The publication provides a useful overview of accounting for transactions encountered by our clients in their business. By encouraging debate on these topics, the aim is to encourage consistent practices among companies in the pharmaceutical and life sciences industries in IFRS financial reporting. This consistency will be critical to the acceptance and usefulness of their financial statements.