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Live Online: Pharma Accounting & Financial Reporting

23-26 November 2020 | 4-Day Live Online | 1:30 pm – 5:30 pm (SGT)

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About the Course

The pharma & biotech industry is capital-intensive, rapidlyevolving and heavily regulated. It also comprises a vast network of entities researching, developing, promoting, collaborating & distributing medicinal & medical products. Amid economic uncertainty and continuous growths in R&D activities, the Finance & Accounting professionals require informed judgements to answer a wide range of complex questions

This masterclass offers advanced analyses of accounting & financial reporting practices crucial to Pharma & Biotech sectors, highlighting key considerations in relation to current economic climate. Discussions on latest standard developments and scenario-setting exercises will encompass practical topics including joint arrangement (e.g. collaborative research, codevelopment, copromotion); Revenue recognition (e.g. sale & outlicensing of IPs), use of financial instruments; Covid-19 related impairments; Asset acquisition & diverstitures; Tax planning; Lease contracts; as well as specific issues relating to manufacturing & clinical research.


Key Learning Outcomes & Case Studies Include

  • In-depth analyses of revenue recognition (IFRS 15) in pharma & life science sectors
  • Covid-19 particular considerations on accounting & financial reporting
  • Accounting and reporting issues relating to pharma manufacturing & contract manufacturing
  • Accounting for revenue sharing, profit sharing and milestone payments contracts
  • Issues relating to asset acquisition and mergers/acquisitions
  • Accounting for sale returns – saleable vs expired goods
  • Issues relating to research, development activities and clinical trials
  • IFRS 16 (Lease standard) and IFRS 9 (Financial Instruments) and impacts on pharmaceutical industry
  • IAS 12, deferred taxes and recognition of taxes in pharma industry
  • Issues relating to leasing of pharma manufacturing facilities
  • Hedge accounting for pharmaceutical industry


Case Studies & Discussions Include

  • Covid-19 particular considerations on accounting & financial reporting
  • Accounting of chargebacks, rebates, promotion schemes etc.
  • Accounting for intangible assets (e.g. in-licensing arrangements, R&D expenditure, options over IP, research upfront payments) Challenges with goodwill/asset impairment testing
  • Identify the performance obligations in the contract
  • Identification of principal and agent, in case of arrangement with distributors
  • Contingencies and Loss Recoveries


Course Directors

Chetan Hans
Director – Financial Reporting Advisory Services
Grant Thornton (Singapore)

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Ashish Gupta (FCA)
Grant Thornton (India)

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Live Online Learning

Stay Home. Skill Up!

The current Covid-19 pandemic has put strains on various areas of business, especially when it comes to deriving commercial value from new initiatives. During this phase of self-isolation and working from home, we can help you meet your professional development needs and you can still take your professional development plans to the next level.

To support your learning goals we have converted our face-to-face trainings to LIVE Online Sessions. This way you can continue to attend live and interactive training sessions within the virtual classroom space where you can see and speak, with your Subject Matter Expert and other participants.

Benefits of Live Online Learning

Aimed at offering you immediate, high-quality practical information whilst minimising time and expenditure associated with travelling, our digital training platform enables you to interact in real time with course directors and remotely network with your fellow participants.

  • Classroom Experience: Progress with fellow participants as you would in an on-site class
  • Guaranteed cost-effectiveness: Travel budget saving, plus 20% price advantage for online participation
  • Controlled environment with speakers managing the Q&A and discussions and tools for enhanced interactions
  • Module-based approach to effectively manage your time and revisions
  • Earn your Digital Certification and broadcast your achievements to your peers
  • Onboarding: Available for all attendees
  • Proven and secure training platform


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Understanding of the 5-step model of recognizing revenue

Identify the contract(s) with the customer (Step 1)

  • Collaborative arrangements/Partnership agreement
    • Codevelopment & comarketing agreements
    • Copromotion agreements
  • Contract combinations
  • Contract modifications


Identify the performance obligations in the contract (Step 2)

  • Customer options for additional goods or services – Material right
  • Shipping and handling activities


Determine the transaction price (Step 3)

  • Variable consideration – Accounting of typical schemes, free goods, chargebacks, non cash incentives, discounts, rebates, price protection, liquidated damages
  • Accounting of sale returns – saleable v/s expired
  • Determine transaction price
  • Subsequent changes in the transaction price
  • Significant financing component
  • Non-cash consideration
  • Consideration payable to customer
  • Price protection arrangements
  • Price appreciation rights


Allocate the transaction price to the performance obligations (Step 4)

  • Methods of estimating Variable consideration
  • Estimating standalone selling price
  • Accounting for non-refundable upfront fees


Recognise revenue when (or as) each performance obligation is satisfied (Step 5)

  • Over time or point in time revenue recognition
  • Timing of revenue recognition – dispatch/shipment/delivery/acceptance
  • Timing of revenue recognition – stock transfer v/s sale – role of depo/intermediary/customer


Contract Costs:

  • Contract acquisition cost
  • Contract fulfilment cost
  • Amortization of contract costs


Sale or out licensing of IP rights

  • Future milestone payments, royalty
  • Sale, out-license of nonfinancial assets
  • Accounting model



  • Principal and agent considerations – Gross v/s Net accounting
  • Arrangement involving medical devices consumables
  • Embedded derivative – Billing in third currency
  • Typical issues relating to government procurement contracts
  • Accounting of joint development contracts
  • Accounting for IPD arrangements
  • Accounting for CRO arrangements – identification of performance obligations, success payments, integrated services, application of constraint


Issues relating to Pharma manufacturing & contract manufacturing

  • Dossier/out-licensing arrangements with (or without) manufacturing obligations
  • Identification of the distinct performance obligations
  • Pattern of revenue recognition for milestone payments
  • Accounting for revenue sharing v/s profit sharing v/s milestone payments – implications of floors, tiered pricing, delays in receiving revenue reports, allocation in case of multiple performance obligations
  • Assessment of Principal and agent in case of contract with distributors




  • R&D funding arrangements
    • R&D funding arrangements involving new legal entities
    • R&D funding arrangements involving a sponsor of a new company
  • R&D cost classification
  • Non-refundable advance payments
  • Refundable Tax credits for qualifying R&D expenditures
  • FDA priority review vouchers
  • Issues relating to accounting for in-licensing arrangements
  • Accounting of options over IP
  • ‘In process R&D’ in case of business combinations
  • Upfront payments to conduct research



  • Issues relating to leasing & construction of Pharma manufacturing facilities:
    • greenfield v/s brownfield
    • enabling assets
    • temporary structures
    • shared utilities
    • phased commissioning
    • captive facilities
    • borrowing cost
  • Issues relating to acquisition of assets:
    • Insurance costs
    • Maintenance/warranty costs
    • Embedded software
    • Spares taken with purchase
    • Future commitments for spares, along with initial purchase
    • Componentization
  • Spares/replacements/repairs accounting:
    • Change parts
    • Regulatory software upgrades
    • Maintenance for compliance for regulatory inspections etc.
    • Relocation/rearrangements
    • Foreign currency issues relating to asset purchases
    • Typical embedded lease issues for pharma facilities



  • Determination of CGUs
  • Assessment of impairment indicators
    • Expiry of patents or changes in legislation covering patents;
    • Development of a drug by a competitor with a superior potential;
    • General advances in the manner of treating particular diseases;
    • National health care reforms impacting
  • reimbursement policies of insurance companies, etc
  • Impairment of patents, trademarks, know-how, marketing tie ups, goodwill
  • Typical challenges with goodwill/asset impairment with products in gestation period



  • Identifying impairment of assets
    • Drug development cycle and approval delays; sales; Lab & site closures; fair value, etc
    • API supply disruption
    • Unavoidable liability or loss-making contracts
    • Non-financial assets
  • Revenue-cycle accounting
  • Lease contracts
  • Government grants
  • Collectability and revenue recognition
  • Cash flow models for non-financial assets
  • Liquidity
  • Inventory
  • Contingencies and Loss Recoveries




  • Overview of the standard
  • Debt v/s equity issues on R&D financing structures.
  • Classification and measurement: financial asset and financial liabilities
    • Amortised cost
    • Fair value through profit or loss
  • Fair value through OCI
  • Accounting for derivatives
  • Expected credit loss model (Impairment)
  • Derivatives
    • Considerations related to embedded derivatives
    • Contracts on entity’s own equity
  • Hedge accounting in pharma
    • Fair value hedge
    • Cash flow hedge
    • Net investment hedge
  • Accounting for debt modifications
  • Fair value measurement disclosures



  • Overview of the standard
  • Intra entity transfers of IP
  • Research and development
    • R&D cost sharing arrangements
    • R&D assets acquired in a business combination
  • Valuation allowance and tax planning strategies
  • Prescription drug fees
  • Recognition of Current Tax and deferred taxes
  • Recognition of deferred tax asset for loss making
  • companies
  • Presentation and Disclosures




  • Identifying lease contracts
  • Components of a contract
    • Lease and non-lease components
    • Multiple lease components
  • Embedded leases
    • Determining Whether a Service Arrangement Contains a Lease
    • Accounting for an Embedded Lease with Lease and Non lease Components
  • Low value asset and short term lease exemptions
  • Assessment of lease term
  • Rebates/deferral because of Covid-19
  • Variable lease payments
  • Lease modifications
    • Modification Resulting in a Separate Contract
    • Modification not Resulting in a Separate Contract
  • Subleases
  • Sale and leaseback transaction



  • IPR&D Intangible assets acquired in a business combination
    • Whether to Recognize Intangible Assets Apart from Goodwill for IPR&D Activities Acquired in a
  • Business Combination
  • Identifying IPR&D
  • Defensive IPR&D acquired in a business combination
    • Recording and Subsequent Measurement of
  • Acquired IPR&D Assets Held for Defensive Purposes
  • Out licensing arrangement
  • Determining the unit of account for IPR&D
  • Subsequent accounting for acquired IPR&D assets
  • IPR&D impairment considerations
  • Settlement of Preexisting Relationships
  • Initial and subsequent accounting for contingent consideration



  • Due diligence
  • Carve-out financial statement
  • Spin-off
  • Discontinued operations
  • Divestiture strategy
  • Tax



  • Understanding and applying IFRS 10 Consolidated
    • Concept of de facto control, voting and other rights
  • Joint arrangements under IFRS 11 Joint Arrangements
    • Joint operations – parties involved with joint control have rights to the assets and obligations for the liabilities
    • Joint ventures – parties involved with joint control have rights to the overall assets of the arrangement
  • Initial accounting for new subsidiaries

when & where

23 - 26 Nov 2020

4-Day Live Online
1:30 pm – 5:30 pm (SGT)

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