Research and development expenses amortization of

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Research and development expenses , .. , .. , . , .. , , .. , Amortization of intangible assets , . Acquisition-related in-process research and development charges . Restructuring charges and acquisition-related costs , . Other deductions-net . Income from continuing operations before provision for taxes on income . Provision for taxes on income ........................................... .......... Income from continuing operations . Discontinued operations-net of tax . Net income before allocation to noncontrolling interests . Less: Net income attributable to noncontrolling interests . Net income attributable to Pfizer Inc ........................................... ........ Earnings per common share-basic Income from continuing operations attributable to Pfizer Inc. common shareholders . Discontinued operations-net of tax . Net income attributable to Pfizer Inc. common shareholders ..................... ........ Earnings per common share-diluted Income from continuing operations attributable to Pfizer Inc. common shareholders . Discontinued operations-net of tax . Net income attributable to Pfizer Inc. common shareholders . Weighted-average shares-basic . Weighted-average shares-diluted ........ •..• ....... .......... ..................... 16,279 19,614 9,4-13 5,404 125 3,21 4 4,338 9,422 1,124 8,298 (9) 8,289 32 $ 8,257 $ 1.03 $ 1.03 $ 1.02 $ 1.02 8,036 8,074 We begin by discussing revenue, including the revenue recognition criteria that companies m employ and improper revenue recognition that the SEe has recently challenged. Next, we discuss Pfizer's research and development expenses, restructuring charges, provision for taxes, effects = foreign currency fluctuations, extraordinary items, and earnings per share (EPS). Revenue and its Recognition Pfizer reports $67,809 million in revenue. This revenue represents the culmination of a proc that includes the manufacture of the drugs, their promotion, the receipt of orders, delivery to the customer, billing for the sale amount, and collection of the amounts owed. At what point in t - process should Pfizer recognize its revenue and the related profit? When the drugs are deliver to the customer? When payment is received? And, how should Pfizer treat sales discounts rights of return? GAAP specifies two revenue recognition criteria that must both be met for revenue be recognized on the income statement. Revenue must be (1) realized or realizable, and C: earned." Realized or realizable means that the seller's net assets (assets less liabilities) increase That is, the seller receives an asset, such as cash or accounts receivable, or satisfies a liabili_ such as deferred revenue, as a result of a transaction. The company does not have to wait to recog nize revenue until after it collects the accounts receivable; the increase in the account receivab ~ (asset) means that the revenue is realizable. Earned means that the seller has performed its duti under the terms of the sales agreement and that title to the product sold has passed to the buy 4 SEe provides guidance for revenue recognition in Staff Accounting Bulletin (SAB) 101 (http.z/ account/sablOl.htm) that states that revenue is realized, or realizable, and earned when each of the following crit -
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