Accounts Receivable, Net

9 Months Ended

Sep. 30, 2012

Receivables [Abstract]

Accounts Receivable Disclosure

3.       Accounts receivable, net

Accounts receivable at September 30, 2012 of $863.6 million(December 31, 2011: $845.0 million), are stated net of a provision for discounts and doubtful accounts of $49.5 million (December 31, 2011: $31.1million).

Provision for discounts and doubtful accounts:

	2012	2011
	$’M	$’M
	_____________	_____________
As at January 1,	31.1	23.4
Provision charged to operations	214.9	172.5
Provision utilization	(196.5)	(169.0)
	_____________	_____________
As at September 30,	49.5	26.9
	_____________	_____________

At September 30, 2012 accounts receivable included $41.1 million (December 31, 2011: $73.3 million) related to royalty income.

Since the second quarter of 2011 the Company has not recognized royalty income for 3TC and ZEFFIX for certain territories due to a disagreement between GSK, ViiV Healthcare (“ViiV”) and the Company about how the relevant royalty rate should be applied given the expiry dates of certain patents. In October 2012 the Company, GSK and ViiV settled this disagreement and in the fourth quarter of 2012 the Company will recognize royalty income in respect of prior periods of $38.0 million as a result. No amounts in respect of the settlement have been recorded as at September 30, 2012.