The generic drug company Mylan declared that it has come to an agreement with the US government and various states for underpaying medicare rebates for their drug Epipen. They claim the settlement is for $465M and took a charge in the 3rd quarter for that amount. However, there is no mention of any kind of agreement with Mylan on the department of justice website. Fortune has an article on this. Based on an article I read on a law site, it looks like they might be liable for a couple of billion dollars when all the penalties and fines are added up.
In any case, my question is - if the company has not paid any settlement money to the government for fiscal year 2016 - are they allowed to declare the expense for 2016 even though the actual payout will be sometime in 2017 or perhaps even 2018? If they are not allowed to do that, then will they have to restate earnings for the 3rd quarter of 2016?
In any case, my question is - if the company has not paid any settlement money to the government for fiscal year 2016 - are they allowed to declare the expense for 2016 even though the actual payout will be sometime in 2017 or perhaps even 2018? If they are not allowed to do that, then will they have to restate earnings for the 3rd quarter of 2016?