Revenue Recognition and Accounts Receivable

6 Months Ended

Jun. 30, 2011

Revenue Recognition and Accounts Receivable

Revenue Recognition and Accounts Receivable

2.	Revenue Recognition and Accounts Receivable

Mylan recognizes revenue for product sales when title and risk of loss pass to its customers and when provisions for estimates, including discounts, sales allowances, price adjustments, returns, chargebacks and other promotional programs, are reasonably determinable. Accounts receivable are presented net of allowances relating to these provisions. No revisions were made to the methodology used in determining these provisions during the six months ended June 30, 2011. Such allowances were $808.7 million and $751.8 million at June 30, 2011 and December 31, 2010. Other current liabilities include $164.8 million and $167.0 million at June 30, 2011 and December 31, 2010, for certain sales allowances and other adjustments that are paid to indirect customers.

Upon receiving final approval from the U.S. Food and Drug Administration ("FDA") in July 2010, Mylan commenced immediate shipment of minocycline hydrochloride extended release ("minocycline ER") tablets, the generic version of Medicis Pharmaceuticals Corporation's Solodyn^®. Mylan also reached settlement and license agreements with Medicis Pharmaceuticals Corporation ("Medicis") resolving patent litigation relating to minocycline ER, and the Company ceased additional distribution. Pursuant to the terms of the agreements, Medicis released Mylan from any liability related to the prior sales of the product, and Mylan has the right to market minocycline ER in the U.S. beginning in November 2011, or earlier under certain circumstances.

As a result of significant uncertainties surrounding the pricing and market conditions with respect to this product, Mylan was not able to reasonably estimate the amount of potential price adjustments, including product returns. Therefore, revenues on shipments of this product were deferred until the resolution of such uncertainties. At the present time, such uncertainties are resolved upon customers' sale of this product. As a result, the Company is recognizing revenue only upon its customers' sale of this product.

- Definition

Disclosure of accounting policy for revenue recognition. If the entity has different policies for different types of revenue transactions, the policy for each material type of transaction is generally disclosed. If a sales transaction has multiple element arrangements (for example, delivery of multiple products, services or the rights to use assets) the disclosure may indicate the accounting policy for each unit of accounting as well as how units of accounting are determined and valued. The disclosure may encompass important judgment as to appropriateness of principles related to recognition of revenue. The disclosure also may indicate the entity's treatment of any unearned or deferred revenue that arises from the transaction.

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