In the Pharma&Biotech segment, the percentage of completion (POC) method was applied to account for development contracts as well as a long-term manufacturing contract with the economic substance of a construction contract. The stage of completion is estimated on the basis of costs incurred, compared with total forecasted costs. This accounting method is applied only to customer contracts with defined payment and delivery dates. Contract costs are usually recognized as an expense in the income statement in the accounting periods in which the work is performed. An expected excess of contract cost over total contract revenue is recognized as an expense as soon as it is apparent that total contract cost may exceed total contract revenue.
|Contract revenue recognized as revenue in the period||59||98|
|– Contract costs incurred||7||8|
|– Recognized profits less recognized losses||1||8|
|Contract costs incurred plus recognized profits / less recognized losses||8||16|
|Less progress billings||(2)||0|
|Total net amount due from customers||6||16|
|Gross amount due from customers for contract work||6||16|