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Group Management Report Corporate Governance Environment, Safety, and Corporate Social Responsibility Consolidated Financial Statements 89 The following table provides the exchange rates for ALTANA’s most important currencies to the Euro: Spot rate Average rate for the years ended Dec. 31 Dec. 31, 2014 Dec. 31, 2015 2014 2015 1 Euro Brazil BRL 3.22 4.31 3.12 3.70 China CNY 7.54 7.06 8.19 6.97 India INR 76.72 72.02 81.04 71.20 Japan JPY 145.23 131.07 140.31 134.31 Switzerland CHF 1.20 1.08 1.21 1.07 U.S. USD 1.21 1.09 1.33 1.11 Revenue Recognition Revenue mainly results from the sale of products and goods and is recognized when the revenue can be measured reliably, it is probable that the economic benefits of the transaction will flow to the Company and all related costs can be measured reliably. As such, ALTANA recognizes revenue from product sales when the significant risks and rewards of ownership of the goods are transferred to the customer. Provisions for discounts and rebates to cus- tomers and for returns of goods are recognized in the same period in which the related reve- nue is recognized and are based on management’s best estimate. Research and Development Expenses In accordance with IAS 38, “Intangible Assets,” research costs, defined as costs of original and planned research performed to gain new scientific or technical knowledge and understand- ing, are expensed as incurred. Development costs are defined as costs incurred to achieve tech- nical and commercial feasibility. When the recognition criteria of IAS 38 are fulfilled, the directly attributable development costs are recognized as intangible assets. In the majority of the cases, the recognition criteria are not completely fulfilled due to the uncertainties regard- ing the commercialization of products inherent to the development of ALTANA’s products. Personnel and Interest Expense The net interest expense from employee benefit obligations is reported under interest expense and not under personnel expense or functional cost. Income Taxes Income taxes include current and deferred income taxes. Current income taxes relate to all taxes levied on taxable income of the consolidated companies. Other taxes such as property taxes or excise taxes (power supply, energy) are classified as functional costs.


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