The SUMIFS formula is a powerful formula that every biotech accountant should be able to use. Today, I am going to walk through how to use this formula with a NetSuite saved search to automate an accrual monthly reconciliation. This setup has worked well for preparing preclinical, clinical and CMC accruals.
Excel's SUMIFS formula is a simple but powerful function that any model-builder should understand. The logic is simple. The first argument is the range that the user wants to be added. The next argument pair is the criteria range and the accepted criterion required to add the value in the sum range.
ASC 606 has made understanding revenue recognition patterns more complicated. Having an understanding of the model economics will help explain current period revenue and predict future revenue patterns. Below are the four drivers that impact how revenue is recognized over the life of a proportional performance model:
Excel is a powerful tool. Almost every small company uses Excel to track budgets, forecasts and long range plans. But, Excel files can quickly get out of hand if not planned appropriately. I've heard that time spent in Excel should 80% planning and 20% execution, especially if the file will be used frequently in the future. Below, I discuss a few tips on how to maximize efficiency while avoiding complexity in your Excel spreadsheets.
The biotech IPO market is strong, with over 20 biotech IPOs announced this year through May 2018. If your company is considering an IPO, an enormous amount of preparation is needed for the successful execution of this transaction. One aspect to consider is executing the impact of the reverse stock split disclosed throughout the S-1 document. The reverse stock split is necessary to price an IPO in the $13-$17 price range typical of early stage biotech IPOs.
Key assumptions are the foundation of any model. Modelers should focus the majority of their effort compiling and validating key assumptions. In addition, assumptions need to be clearly communicated so users know the framework the model is built around.
In May 2014, the Financial Accounting Standards Board (or FASB) issued ASU 2014-09, Revenue from Contracts with Customers (ASC 606), changing how biotech companies account for the revenue associated with their strategic collaboration agreements.Public companies were required to adopt the standard by January 2018 and have issued their first set of financials in the Q1 2018 10-Qs. Companies such as Blueprint Medicines, Surface Oncology, Jounce Therapeutics and Seres Therapeutics to name a few. Private companies will be required to adopt the standard by January 2019.
