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Microsoft Excel LibreOffice Calc

Gilead Sciences Inc. (GILD)


Analysis of Inventory

Difficulty: Advanced


Inventory Accounting Policy

Inventories are recorded at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. Gilead periodically reviews the inventories to identify obsolete, slow-moving, excess or otherwise unsaleable items. If obsolete, excess or unsaleable items are observed and there are no alternate uses for the inventory, Gilead records an inventory valuation reserve through a charge to Cost of goods sold on the Consolidated Statements of Income. The establishment of inventory valuation reserves, together with the calculation of the amount of such reserves, requires judgment including consideration of many factors, such as estimates of future product demand, product net selling prices, current and future market conditions and potential product obsolescence, among others.

When future commercialization is considered probable and the future economic benefit is expected to be realized, based on management’s judgment, Gilead capitalizes pre-launch inventory costs prior to regulatory approval. A number of factors are taken into consideration, including the current status in the regulatory approval process, potential impediments to the approval process such as safety or efficacy, anticipated R&D initiatives that could impact the indication in which the compound will be used, viability of commercialization and marketplace trends. As of December 31, 2018 and 2017, the amount of pre-launch inventory on Gilead’s Consolidated Balance Sheets was not significant.

Source: 10-K (filing date: 2019-02-26).


Inventory Disclosure

Gilead Sciences Inc., balance sheet: inventory

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Raw materials hidden hidden hidden hidden hidden
Work in process hidden hidden hidden hidden hidden
Finished goods hidden hidden hidden hidden hidden
Inventories hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

Item Description The company
Inventories Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer. Gilead Sciences Inc.’s inventories declined from 2016 to 2017 and from 2017 to 2018.