New Revenue Recognition Rules - Implications for BioTech Companies
Recently approved changes by the Emerging Issues Task Force (EITF) to revenue recognition guidance for multiple-element arrangements have generally been well received by companies that offer products and services on a bundled basis. However, biotech industry which relies heavily on long term strategic and collaboration arrangements with pharmaceutical companies to finance product development efforts, may not get as much relief as might be available to their counterparts in the technology sector. This article authored by Aftab Jamil, audit partner at BDO Seidman, outlines the unique challenges facing biotech companies and how through careful planning during contract negotiations and diligent efforts to maintain adequate record during the contract execution phases can help biotech companies navigate through the most significant revenue recognition challenges to avoid complicated and undesirable accounting consequences.
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