ANNUAL REPORT 2012 - TiGenix

are provided and costs are incurred. These
services are usually in the form of a defined
number of full-time equivalents (“FTE”) at a
specified rate per FTE.
Government grants are recognized as
revenue over the life of the grant as the
required or planned activities are performed
and the related costs incurred and when
there is reasonable assurance that the Group
will comply with the conditions of the grant.
The grants are usually in the form of periodic
progress payments.
Deferred revenue represents amounts
received prior to revenue being earned.
11.5.2.7. Cost of sales
Cost of sales includes the costs directly
attributable to production and the costs
incurred necessarily for the products to be
sold or the services to be rendered.
11.5.2.8. Property, plant and equipment
Property, plant and equipment are stated at
historical cost less accumulated depreciation
and impairment. Repair and maintenance
costs are charged to the income statement
as incurred. Gains and losses on the
disposal of property, plant and equipment
are included in other income or expense.
Depreciation is charged so as to write off the
cost or valuation of assets over their useful
lives, using the straight-line method pro rata
in the year of purchase, on the following
basis :
- Leasehold improvements : in line with the
lease agreement period; and
- Leases : in line with the lease agreement
period.
Properties in the course of construction for
production, supply or administrative purposes
are carried at cost, less any recognised
impairment loss. Cost includes professional
fees and, for qualifying assets, borrowing
costs capitalised in accordance with the
Group’s accounting policy. Such properties
are classified to the appropriate categories
of property, plant and equipment when
completed and ready for intended use.
Depreciation of these assets, on the same basis
as other property assets, commences when
the assets are ready for their intended use.
11.5.2.9. Intangible assets
Internally-generated intangible assets –
research & development expenditure
Expenditure on research activities is
recognized as an expense in the period in
which it is incurred.
An internally-generated intangible asset
arising from development is recognized
to the extent that all conditions for
capitalisation have been satisfied as
specified in IAS 38 :
- the technical feasibility of completing the
intangible asset so that it will be available
for use or sale;
- Equipment : 5 years;
- IT hardware : 3 years;
- Furniture : 5 years;
- the intention to complete the intangible
asset and use or sell it;
- the ability to use or sell the intangible asset;
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