Company: LGNZZ
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000886163-25-000012
Chunk: 142

Company: LIGAND PHARMACEUTICALS INC
Filing Date: 2025-02-28
Form: 10-K
Item: Item 8
Chunk 142
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 Primrose Bio, or other investments, based on the nature of the securities and their availability for use in current operations. For additional information, see “Note (7), Balance Sheet Account Details.” Accounts Receivable and Allowance for Credit Losses Our accounts receivable arise primarily from sales on credit to customers. We establish an allowance for credit losses to present the net amount of accounts receivable expected to be collected. The allowance is determined by using the loss-rate method, which requires an estimation of loss rates based upon historical loss experience adjusted for factors that are relevant to determining the expected collectability of accounts receivable. Some of these factors include macroeconomic conditions that correlate with historical loss experience, delinquency trends, aging behavior of receivables and credit and liquidity quality indicators for industry groups, customer classes or individual customers. During the years ended December 31, 2024, 2023 and 2022, we considered the current and expected future economic and market conditions and concluded a decrease of $0.1 million, an increase of $0.2 million, and a decrease of $0.3 million of allowance for credit losses, respectively. 

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InventoryInventory, which consists of finished goods (Captisol), is stated at the lower of cost or net realizable value. We determine cost using the specific identification method. We analyze our inventory levels periodically and write down inventory to net realizable value if it has become obsolete, has a cost basis in excess of its expected net realizable value or is in excess of expected requirements. During the years ended December 31, 2024, 2023 and 2022, we recorded an obsolete inventory charge of $0.2 million, $0.2 million and $1.1 million, respectively. In addition to finished goods, as of December 31, 2024 and 2023, inventory included prepayments of $3.1 million and $4.6 million, respectively, to our supplier for Captisol.Property and EquipmentProperty and equipment are stated at cost, subject to review for impairment, and depreciated over the estimated useful lives of the assets, which generally range from one to nine years, using the straight-line method. Amortization of leasehold improvements is recorded over the shorter of the lease term or estimated useful life of the related asset. Maintenance and repairs are charged to operations as incurred. When assets are sold, or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts