Distinguishing a Business from an Asset or a Group of Assets

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01/16/2014 by Pharmaceuticals & life science
Distinguishing a Business from an Asset or a Group of Assets

At a glance

This Pharmaceutical and Life Sciences Industry GAAP Alert focuses on the key accounting considerations when making this determination and provides illustrative examples.

Pharmaceutical, biotech, medical device and other life sciences companies frequently deal with the highly judgmental and complicated area of determining whether an acquisition, investment or license should be accounted for as a business combination or an asset acquisition. This distinction matters as the accounting for a business combination varies significantly from the accounting for an asset acquisition, particularly in the pharmaceutical and life sciences industry. This Alert focuses on the key accounting considerations when making this determination and provides illustrative examples.