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Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets | 12 Months Ended
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Dec. 31, 2022
Credit Loss [Abstract] |
Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets | Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets The cumulative allowance for changes in expected future cash flows from financial royalty assets is presented net within the non-current portion of financial royalty assets on the consolidated balance sheets and includes the following activities: •the movement in the cumulative allowance related to changes in forecasted royalty payments expected to be received based on projected product sales for royalty bearing products which are estimated using sell-side equity research analysts’ consensus sales forecasts, •the write-off of cumulative allowance at the end of a royalty asset’s life which only impacts the consolidated balance sheets, and •the movement in the cumulative allowance for current expected credit losses, primarily associated with new financial royalty assets with limited protective rights and changes in the underlying cash flow forecasts of financial royalty assets with limited protective rights. The following table sets forth the activity in the cumulative allowance for changes in expected cash flows from financial royalty assets, inclusive of the cumulative allowance for credit losses, as of the dates indicated (in thousands):
| Activity for the Year
Balance at December 31, 2019 | $ | (868,418) |
Cumulative adjustment for adoption of ASU 2016-13 | (192,705) |
Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets | (645,612) |
Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets | 570,959 |
Write-off of cumulative allowance | 2,964 |
Write-off of credit loss allowance (1) | 25,174 |
Provision for credit losses, net (2) | (156,186) |
Balance at December 31, 2020 | $ | (1,263,824) |
Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets | (912,710) |
Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets | 446,955 |
Write-off of cumulative allowance | 21,721 |
Provision for credit losses, net (2) | 12,913 |
Balance at December 31, 2021 | $ | (1,694,945) |
Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets | (1,394,679) |
Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets | 296,637 |
Write-off of cumulative allowance | 5,723 |
Write-off of credit loss allowance | 1,584 |
Provision for credit losses, net (2) | 193,798 |
Balance at December 31, 2022 | $ | (2,591,882) |
(1)Relates to amounts reversed out of the credit loss allowance associated with omecamtiv mecarbil as a result of the gross write-off of the related financial royalty asset balance of $90.2 million. (2)For 2020, the provision for credit losses was primarily related to certain additions to our portfolio of financial royalty assets with limited protective rights, mainly the final tranche of Tazverik. For 2021, the provision income for credit losses was primarily related to a significant decline in value of Tazverik, which was offset by increases in the value of zavegepant. For 2022, the provision income for credit losses was primarily related to further declines in the value of Tazverik and changes in the payors for certain products with stronger credit profiles, which were partially offset by the addition of Trelegy to our portfolio of financial royalty assets with limited protective rights.

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- Definition The entire disclosure for credit loss on financial instrument measured at amortized cost basis, net investment in lease, off-balance sheet credit exposure, and available-for-sale debt security. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 30 -Section 50 -Paragraph 7 -URI https://asc.fasb.org/extlink&oid=124269663&loc=SL82922895-210455 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919272-210447 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 50 -Paragraph 8 -URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919236-210447 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 50 -Paragraph 20 -URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919269-210447 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 30 -Section 50 -Paragraph 4 -URI https://asc.fasb.org/extlink&oid=124269663&loc=SL82922888-210455 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 50 -Paragraph 11 -URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919244-210447 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 50 -Paragraph 5 -URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919230-210447 + Details
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