Implementing the new revenue recognition …

Implementing the new revenue recognition standardLife sciencesSeptember 2015 Financial Accounting Advisory ServicesIFRS 15 revenue from Contracts with Customers was issued in May 2014. It, together with the FASB s new revenue standard, Accounting standards Update 2014- 09, revenue from Contracts with Customers, will replace virtually all existing revenue recognition requirements in IFRS and US GAAP with a single framework. The new standards provide accounting requirements for all revenue arising from contracts with customers and affect all entities that enter into contracts to provide goods or services to their customers (unless the contracts are in scope of other standards , such as IAS 17 Leases). life sciences entities will have some specific issues to consider. These may include: Identifying which arrangements with payers will be in the scope of IFRS 15 Changing processes and controls for making estimates in order to comply with IFRS 15 s requirement for estimating variable consideration Identifying and accounting for separate performance obligations in complex arrangements ( , bundled R&D and licence contracts) Evaluating reseller and distributor arrangements and when revenue should be recognised and whether revenue should be recognised gross or netEY can assist you with the transition and help you understand the implications for life sciences issues for implementation The new framework introduces

6 Implementing the new revenue recognition standard July 215 Key considerations for the life sciences sector Due to particular types of relationships that life sciences entities have with their customers,

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