applicable revenue recognition approach is then applied to each unit.
Otherwise, the applicable revenue recognition criteria are applied to
combined elements as a single unit of accounting.
Product sales - revenue from product sales contracts is recognized
when the product is shipped to the Company's customers, at which time
ownership is transferred.
Licensing revenues - for up-front licensing payments, revenue is
deferred and recognized on a straight line basis during the estimated
term over which the Company maintains substantive contractual
obligations. Milestone payments are recognized as revenue when the
underlying condition is met, the milestone is not a condition to
future deliverables and collectibility is reasonably assured.
Otherwise, milestone payments are recognized as revenue over the
remaining term of the underlying agreement or the term over which the
Company maintains substantive contractual obligations. Royalty
revenue is recognized in the period in which the Company earns the
royalty. Amounts received in advance of recognition as revenue are
included in deferred revenue. Revenue from licensing and distribution
agreements is presented on a net basis.
2 Changes in accounting policies
Effective January 1, 2007 the Company adopted the CICA Handbook
Section 1530, "Comprehensive income" and CICA Handbook section 3855,
"Financial instruments - recognition and measurement".
Comprehensive income introduces a new requirement to present, among
other things, certain unrealized gains and losses outside of net
income or loss. Section 1530 defines comprehensive income as a change
in net assets arising from transactions and other events and'/>"/>
|SOURCE Cipher Pharmaceuticals Inc.|
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