The new accounting buzz word ‘trigger’

I found the word ‘trigger’ in several annual reports. Not as you might guess in the sense of pulling the trigger of a gun, because none of the annual reports related to gun manufacturers. But often companies use it as a verb, in the sense of ‘to cause or bring about’.

Sanofi for instance uses it in its simplest form: ‘The conflict triggered by the Russian invasion of Ukraine …’

I found that AstraZenica trigger things the most, and use it in the most complicated way:

“We perform a rigorous impairment trigger assessment for all our intangible assets.”

I suppose the rigorous relates to their assessments. A rigorous impairment or a rigorous trigger does not mean much. But I am not sure whether they mean an ‘impairment trigger’ or a ‘trigger assessment’.  I guess neither. It would seem, therefore, that they have invented a new accounting buzz word the ‘impairment trigger assessment’ which they perform rigorously for all their intangible assets. Other companies merely test their intangible assets for impairment.

And AstraZenica trigger so many complicated actions. They trigger regulatory milestone payments, sales-related milestones, development and regulatory milestone payments and the entitlement to cash severance arrangements. Plus they have set trigger points and trigger events from time to time. So AstraZenica find triggering a popular activity in their company.

And then in the context of clinical and regulatory milestones, I found this impossible to understand sentence. I don’t know what it means, but triggering seems important:

“There can be significant uncertainty over whether it is highly probable that there would not be a significant reversal of revenue in respect of specific milestones if these are recognised before they are triggered due to them being subject to the actions of third parties.”

Other companies have simpler trigger actions. They trigger uncertainty, they trigger competition and one triggers licences. But triggering is not such a popular activity as in AstraZenica . A few companies trigger nothing at all in their annual reports.