Engineering

3.6 Consolidated financial statements Notes to the consolidated financial statements
Government grants
Government grants are recognized only if there is reasonable
assurance that the associated conditions will be met and the grants will
be received. Grants related to assets are reported as a reduction of
cost of the assets concerned with a corresponding reduction of
depreciation and amortization in subsequent periods. Grants related to
income are stated as other operating income in the periods in which
the expenses intended to be compensated by the grant are recognized.
Research and development costs
Research costs are expensed as incurred.
Development costs, whereby research findings are applied to a plan or
design for the production of new or substantially improved products
and processes, are capitalized if the product or process is technically
and commercially feasible, there is a market for the output of the
intangible asset, the attributable expenditure can be measured reliably,
and the Group has sufficient resources to complete development.
Other development costs are expensed as incurred. Capitalized
development costs of completed projects are stated at cost less
accumulated amortization. Costs include direct costs of material, direct
labour, and allocable material and manufacturing overhead. Borrowing
costs directly attributable to a production of assets that necessarily
takes a substantial period of time to get the assets ready for their
intended use, are included in the cost of those assets until the assets
are ready for their intended use. Administrative costs are capitalized
only if such costs are directly related to production. Capitalized
development costs of projects not yet completed are reviewed for
impairment annually or more frequently when an indicator of
impairment arises during the reporting year.
Earnings per share
Basic earnings per share amounts are calculated by dividing net
income/(loss) attributable to ThyssenKrupp AG’s shareholders by the
weighted average number of shares outstanding. Shares sold during
the period and shares reacquired during the period are weighted for
the portion of the period that they were outstanding. There were no
dilutive securities in the periods presented.
Consolidated financial statements
142 | 143
Segment reporting
In accordance with the so-called management approach, segment
reporting of the ThyssenKrupp Group is based on the internal
organizational and reporting structure. The data used to determine the
internal key figures are derived from the IFRS consolidated financial
statements.
Single assets held for sale, disposal groups and discontinued
operations
A single non-current asset is classified as held for sale if its carrying
amount will be recovered principally through a sale transaction rather
than through continuing use. The Group reports assets and liabilities
as a disposal group, that will be disposed of by sale or otherwise in a
single transaction, which collectively meet the held for sale criteria as
specified in IFRS 5 “Non-current Assets Held for Sale and Discontinued
Operations”. The Group reports the assets and liabilities of a disposal
group separately in the balance sheet line item “assets held for
sale/disposal” and “liabilities associated with assets held for
sale/disposal”, respectively. Unless a disposal group qualifies for
discontinued operations reporting, the revenues and expenses of the
disposal group remain within continuing operations until the date of
disposal. The Group reports the results of a disposal group that also
qualifies as a component of the Group as discontinued operations if it
represents a separate major line of business or geographical area of
operations. The Group reports the results of discontinued operations in
the period in which they occur separately within the consolidated
statement of income as “discontinued operations (net of tax)”. All prior
period consolidated statements of income are adjusted to report the
results of the component within discontinued operations. In the
consolidated statement of cash flows the cash flows resulting from
discontinued operations are presented separately from cash flows
resulting from continuing operations; prior year presentation has been
adjusted accordingly. In order to present the proportion of income/loss
attributable to discontinued operations, net sales and expenses arising
from intercompany transactions are eliminated provided that these
transactions will not continue after the disposal of the discontinued
operations.