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Issue 4 - Pharmaceutical

Issue 4 - Pharmaceutical

This month the Accounting and Auditing Update focuses on the pharmaceutical sector and highlights key matters relating to accounting, financial reporting and regulatory areas relevant to this sector.


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In this publication, we have highlighted key areas of impact due to adoption of Ind AS: revenue recognition, research and development expenditure, business combinations, intangible assets and government grants on pharmaceutical sector.
We also carry this month the results of a survey that we ran with a number of leading pharmaceutical companies on the key regulatory changes that they face. These include Ind AS, the Companies Act, 2013, Income Computation and Disclosure Standards (ICDS) and proposed Goods and Services Tax (GST).
In this edition of the Accounting and Auditing Update, we also cast our lens on the principles of operating segments under Ind AS and their likely impact on financial reporting on the pharmaceutical companies. We have also highlighted some of the areas in this sector which are expected to be impacted by the implementation of ICDS.
Apart from accounting and financial reporting aspects, the pharmaceutical sector faces various direct and indirect tax issues. For example, tax deductibility of business promotion expenses, various policies on export benefits and impact of the proposed GST. Our articles provide an overview on these tax issues.

Finally, our publication also includes our regular round up of regulatory updates.
This issue includes :

  • Revenue recognition in the pharmaceutical sector -Key considerations 
  • Potential impact of Ind AS on pharmaceutical sector
  • Survey analysis
  • Ind AS 108, Operating Segments and its impact on the pharmaceutical sector
  • Business combinations and accounting for intangibles
  • ICDS – Potential impact on the pharmaceutical sector
  • Export benefits to pharmaceutical sector
  • GST – A sweet pill for the Indian pharmaceutical sector
  • Tax deductibility of business promotion expenses

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KPMG (Registered) (a partnership firm with Registration No. BA- 62445) converted into KPMG Assurance and Consulting Services LLP (a Limited Liability partnership firm) with LLP Registration No. AAT-0367 with effect from July 23, 2020.

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