Biogen Inc. (BIIB)

Accounts Receivable

The majority of Biogen's accounts receivable arise from product sales and primarily represent amounts due from the wholesale distributors, public hospitals and other government entities. Biogen monitors the financial performance and creditworthiness of the customers so that Biogen can properly assess and respond to changes in their credit profile. Biogen provides reserves against trade receivables for estimated losses that may result from a customer's inability to pay. Amounts determined to be uncollectible are charged or written-off against the reserve. To date, Biogen's historical reserves and write-offs of accounts receivable have not been significant.

In countries where Biogen has experienced a pattern of payments extending beyond the contractual payment term and Biogen expects to collect receivables greater than one year from the time of sale, Biogen has discounted the receivables and reduced related revenues over the period of time that Biogen estimates those amounts will be paid using the country's market-based borrowing rate for such period. The related receivables are classified at the time of sale as non-current assets. Biogen accretes interest income on these receivables, which is recognized as a component of other income (expense), net in the consolidated statements of income.

Source: 10-K (filing date: 2018-02-01).

Based on: 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04), 10-K (filing date: 2014-02-06).

2017 Calculations

Ratio	Description	The company
Allowance as a percentage of accounts receivable, gross	Allowance for doubtful accounts divided by the gross accounts receivable.	Biogen Inc.'s allowance as a percentage of accounts receivable, gross declined from 2015 to 2016 and from 2016 to 2017.