Pharmaceutical and Life Sciences

Accounting Alerts

Revenue from contracts with customers — Accounting for fixed consideration in license arrangements

Revenue from contracts with customers (ASC 606) significantly impacts the accounting and financial reporting for many companies in the pharmaceutical and life sciences industry. The accounting treatment for various types of transactions may change as a result of applying ASC 606. This alert highlights some key impacts regarding the accounting for certain forms of fixed consideration in licensing arrangements under ASC 606.

The takeaway

Companies should be mindful that the adoption method selected (that is, full retrospective or modified retrospective) will impact a company’s ability to present these accelerated amounts as revenue in the income statement for contracts that were entered into, and performance obligations that were satisfied, before the adoption of ASC 606.

Contact us

Laura Robinette
US Pharmaceutical and Life Sciences Assurance Leader
Tel: +1 (919) 791 4100

Follow us