Reserves for Discounts and Allowances

As a result of our acquisition of TYSABRI rights from Elan, we began recognizing reserves for discounts and allowances for U.S. TYSABRI revenue in the second quarter of 2013. Prior periods included reserves for discounts and allowances for rest of world TYSABRI revenue and worldwide AVONEX revenue only. In addition, following our start of U.S. commercial sales of TECFIDERA in the second quarter of 2013, we began recognizing reserves for discounts and allowances related to U.S. TECFIDERA revenue.

An analysis of the change in reserves is summarized as follows:



(In millions)	Discounts			Contractual Adjustments			Returns			Total
Balance, as of December 31, 2012	$	15.5		$	194.8		$	26.8		$	237.1
Current provisions relating to sales in current year	202.9			549.8			16.0			768.7
Adjustments relating to prior years	(0.8		)	(7.8		)	0.9			(7.7		)
Payments/returns relating to sales in current year	(145.3		)	(306.1		)	—			(451.4		)
Payments/returns relating to sales in prior years	(13.8		)	(127.8		)	(13.9		)	(155.5		)
Balance, as of September 30, 2013	$	58.5		$	302.9		$	29.8		$	391.2

The total reserves above, included in our condensed consolidated balance sheets, are summarized as follows:



(In millions)	As of September 30, 2013		As of December 31, 2012
Reduction of accounts receivable	$	143.8	$	46.1
Component of accrued expenses and other	247.4		191.0
Total reserves	$	391.2	$	237.1