Revenue Recognition and Accounts Receivable

12 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition and Accounts Receivable

Revenue from Contracts with Customers

The following table presents the Company’s net sales by product category for each of our reportable segments for the years ended December 31, 2020, 2019, and 2018, respectively:

(In millions)	2020 Net Sales
Product Category	Developed Markets		Greater China		JANZ		Emerging Markets		Total
Brands	3,920.7		253.9		617.0		443.3		5,234.9
Complex Gx and Biosimilars	1,202.6		0.7		42.8		49.4		1,295.5
Generics	3,387.6		5.3		535.5		1,361.1		5,289.5
Total Viatris	$	8,510.9	$	259.9	$	1,195.3	$	1,853.8	$	11,819.9

(In millions)	2019 Net Sales
Product Category	Developed Markets		Greater China		JANZ		Emerging Markets		Total
Brands	4,199.1		207.6		533.3		422.1		5,362.1
Complex Gx and Biosimilars	1,127.4		0.4		23.8		59.7		1,211.3
Generics	2,913.5		6.6		635.4		1,241.4		4,796.9
Total Viatris	$	8,240.0	$	214.6	$	1,192.5	$	1,723.2	$	11,370.3

(In millions)	2018 Net Sales
Product Category	Developed Markets		Greater China		JANZ		Emerging Markets		Total
Brands	4,424.5		164.3		503.4		431.5		5,523.7
Complex Gx and Biosimilars	464.6		—		22.4		35.6		522.6
Generics	3,400.0		3.8		607.0		1,211.6		5,222.4
Total Viatris	$	8,289.1	$	168.1	$	1,132.8	$	1,678.7	$	11,268.7

Variable Consideration    

The following table presents a reconciliation of gross sales to net sales by each significant category of variable consideration during the years ended December 31, 2020, 2019 and 2018, respectively:

	Year Ended December 31,
(In millions)	2020		2019		2018
Gross sales	$	19,899.1	$	19,012.2	$	19,588.1
Gross to net adjustments:
Chargebacks	(3,656.2)		(3,309.6)		(3,352.2)
Rebates, promotional programs and other sales allowances	(3,765.5)		(3,629.3)		(4,235.6)
Returns	(329.7)		(237.9)		(261.6)
Governmental rebate programs	(327.8)		(465.1)		(470.0)
Total gross to net adjustments	$	(8,079.2)	$	(7,641.9)	$	(8,319.4)
Net sales	$	11,819.9	$	11,370.3	$	11,268.7

The following is a rollforward of the categories of variable consideration during 2020:

(In millions)	Balance at December 31, 2019		Current Provision Related to Sales Made in the Current Period		Balances Acquired Through Acquisition		Checks/ Credits Issued to Third Parties		Effects of Foreign Exchange		Balance at December 31, 2020
Chargebacks	$	518.6	$	3,656.2	$	92.2	$	(3,685.9)	$	4.1	$	585.2
Rebates, promotional programs and other sales allowances	1,084.1		3,765.5		627.2		(3,896.5)		(4.0)		1,576.3
Returns	393.0		329.7		128.0		(314.8)		4.0		539.9
Governmental rebate programs	312.8		327.8		39.4		(358.8)		(7.9)		313.3
Total	$	2,308.5	$	8,079.2	$	886.8	$	(8,256.0)	$	(3.8)	$	3,014.7

Accruals for these provisions are presented in the consolidated financial statements as reductions in determining net revenues and in accounts receivable and other current liabilities. Accounts receivable are presented net of allowances relating to these provisions, which were comprised of the following at December 31, 2020 and 2019, respectively:

(In millions)	December 31, 2020		December 31, 2019
Accounts receivable	$	1,802.9	$	1,512.0
Other current liabilities	1,211.8		796.5
Total	$	3,014.7	$	2,308.5

We have not made and do not anticipate making any significant changes to the methodologies that we use to measure provisions for variable consideration; however, the balances within these reserves can fluctuate significantly through the consistent application of our methodologies. Historically, we have not recorded in any current period any material amounts related to adjustments made to prior period reserves.