annual Report 2009 - STRATEC Biomedical AG

Research and development
The 2009 financial year saw a continuation of the trend observed in previous years towards development partners only
committing to project development at STRATEC AG in a legally binding manner at a later stage of overall development.
The modular development practiced by STRATEC AG for several years now and the development of platform technologies
take account of the requirements of the market in this respect.
Pursuant to IAS 38 (Intangible Assets), research expenses are not eligible for capitalization and are recognized through
profit or loss upon being incurred. Development expenses not relating to a specific customer order may only be capitalized
when specific conditions set out in detail in IAS 38 are met. Although the companies of the STRATEC Group are to be
viewed in objective terms as development companies, the narrower definition of the conditions governing capitalization of
non-customer-specific development projects as intangible assets set out in IAS 38 were, as in previous years, not met.
As in previous years, customer-specific development projects have been recognized at cost as “Unfinished services”
within inventories.
Non-customer-specific projects have been recognized at the respective cost of these appliances under “Property, plant
and equipment”.
Development projects recognized as “Unfinished services” are amortized from the start of delivery of serial appliances
over the average acceptance period to which customers have committed, unless the development services are separately
remunerated and revenues have already been recognized for the respective project. This average period generally
amounts to five years.
Within property, plant and equipment, prototypes are subject to scheduled depreciation over three years.
Income resulting from expense grants relating to projects in the research and development division is included in the
statement of comprehensive income under “Other operating income”.
Cash flow statement
The cash flow statement has been subdivided into three sections: operations, investments and financing. In the case of
transactions involving more than one category, the flow of funds has been allocated as appropriate to more than one of
the sections. The presentation of the cash flow from operating activities has been based on the indirect method. This
involves eliminating non-cash components from consolidated net income.
Cash and cash equivalents include cash holdings and bank credit balances with terms of less than three months and are
equivalent to the corresponding balance sheet items.
Interest income and expenses are allocated to operating activities, as are the components of other financial income/
expenses. Dividend payments are recognized in the cash flow from financing activities.
Overall, tax payments are reported under operating activities, as allocation to individual business divisions is practically
impossible.
The presentation of interest paid/received and income taxes paid/refunded within the cash flow from operating activities
has been based on the direct method. This involves consolidated net income being corrected in the first step to exclude
the income and expenses recognized in the statement of comprehensive income. The interest and income taxes paid or
received are subsequently reported separately.
The cash flows of foreign subsidiaries whose accounts are denominated in other currencies have been translated to
euros using annual average rates.
The changes in balance sheet items referred to for the development of the cash flow have been adjusted to account
for non-cash items resulting from currency translation, changes in the scope of consolidation and investments not yet
paid for at the balance sheet date. For this reason, the changes in the respective balance sheet items are not directly
comparable with the corresponding figures in the published consolidated balance sheet.
68 stratec Annual Report 2009