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  "documentTitle": "Chinook Therapeutics Inc (KDNY)",
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  "notes": "The slide argues that certain revenue should be reported as net rather than gross, citing specific 10-K filings.",
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      "text": "Approximately $8 million of the $10 million in revenue recognized from the Merck milestone achievement should not be included in the gross revenue because it is passthrough revenue.",
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      "text": "Approximately $8 million of the $10 million in revenue recognized from the Merck milestone achievement should not be included in the gross revenue because it is passthrough revenue.",
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      "text": "As explained above, the $41.2 million revenue recognized in 2021 does not belong in the top line, but should be reported as investment income in other comprehensive income. The $4.2 million recognized in 2022 should be reported in and netted against operating expenses as a cost reimbursement.",
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      "text": "The $10 million milestone revenue is passthrough revenue in substance. Chinook had inherited both the potential milestone payment and obligations to the contingent value rights (CVR) holders from Aduro.",
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      "text": "Approximately $8 million would be payable by estimating the permitted cost deduction at 20%, because the deductions are limited to tax and the out-of-pocket costs. $7.5 million was subsequently paid to CVR holders in 2022.",
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      "text": "At the same time, Chinook recorded expenses that increased its contingent liabilities payable to CVR holders by $25.8 million.",
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      "text": "According to the agreement between Aduro and the CVR holders, Chinook was obliged to pay the seller after making limited, permitted deductions. Thus, the $10 million in revenue should be reported per net, not gross revenue accounting.",
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      "text": "In 2021, Chinook recognized $10 million revenue related to Aduro from Merck. Chinook was obligated to recognize milestone and royalty payments out of this sum, per the terms of the agreement it had inherited from Aduro.",
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      "text": "“a development milestone of $10.0 million recognized under our agreement with Merck and Co, Inc., or Merck. The agreement with Merck was acquired through the Merger.” — Chinook 2022 10-K, pg. 77",
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      "text": "Adjustments to Chinook's Revenue",
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