Change continues to impact and reshape the pharmaceutical, life science, and medical device sector (the “sector”). Income tax reform for mergers and acquisitions, innovation of emerging technologies, pricing, and the evolution of big data have changed how our sector executes business today and plans for the future.
Likewise, the financial reporting landscape has been impacted by change. Over the past year, we have witnessed the accelerated pace of rulemaking at the FASB and the SEC’s clarified guidance and refocus on non-GAAP reporting measures. The past year has seen multiple changes to the US generally accepted accounting principles (GAAP), such as those to share-based compensation, income taxes and more to come with revenue and leasing. The resurgence of the regulator’s focus on non-GAAP measures has impacted how many companies report earnings to investors to address the Staff’s concerns on the prominence of non-GAAP reporting measures.
To help you stay informed, focus on what key stakeholders value in your disclosures, and prepare for upcoming reporting, we've analyzed the SEC staff’s comment letters from the past year. This publication, Stay Informed: 2016 SEC comment letter trends, contains in-depth information on industry-defining areas of scrutiny based on the most recent comment letter trends.
Our review of the comment letters received by companies in the sector indicates a focus by the SEC staff on transparent and accurate financial reporting through clear discussion in the MD&A, an understanding of revenue recognition policies, and compliance with SEC rules including those pertaining to non-GAAP measures.
We hope that you find the insights useful in navigating your upcoming financial reports and the year-end reporting process.
© 2016 - 2017 PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.