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Arena Pharmaceuticals, Inc. Message Board

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  • go4two2001 go4two2001 Aug 7, 2012 2:32 PM Flag

    Analysts Expect ARNA To Have 33% Higher Earnings This Q

    I will not resort to call you a name, but I really want to. :) Starts with a M.

    Didn't you understand my post? The FDA milestone was met and EARNED in the 2nd Qtr. (June 27th). Per REVENUE RECOGNITION rules allowed by GAAP, the milestone is recognized as revenue in the qtr the milestone was met. If it the payment is sent on December, the $20M will still be presented on the 2nd qtr income statement. ARNA would not be allowed to defer this as revenue in the 3rd qtr. It would be a violation of GAAP.

    By the way, your right, it is not earnings. It is revenue. Earnings is net margin. The milestone payment WILL be 2nd QTR REVENUE!

 
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