Life Sciences: Preparing for the New Revenue Recognition Standard

Under the revenue recognition standard issued by the Financial Accounting Standards Board (FASB), companies that recognize revenue from contracts with customers will be required to follow a five-step process. This article explores the significant issues that can make the process particularly complex for companies in the life sciences industry, including licensing, milestone payments, collaboration agreements, and royalties.

In addition, the article lays out an implementation framework that life sciences companies can adopt to improve their odds of being in compliance with the standard by the looming effective dates.