Roche Holding Limited (2008)
Notes to the Roche Group Consolidated Financial Statements [extract]
1. Summary of significant accounting policies [extract]
Segment reporting
Within the Group”s consolidated financial statements, transactions and balances between consolidated subsidiaries, such as between Genentech, Chugai and other Roche Group subsidiaries, are eliminated on consolidation.
Genentech and Chugai are considered separately reportable operating segments for the purposes of the Group”s operating segment disclosures in Note 2. Additional information relating to Genentech and Chugai results is given in Notes 3 and 4, respectively.
Profits on product sales between the Roche Pharmaceuticals, Genentech and Chugai operating segments are recorded as part of the segment results of the operating segment making the sale. Unrealised internal profits on inventories that have been sold by one operating segment to another but which have not yet been sold on to external customers as at the balance sheet date are eliminated as a consolidation entry at a Pharmaceuticals Division level.
Additionally the results of each operating segment may include income received from another operating segment in respect of:
- Royalties
- Licensing, milestone and other upfront payments
- Transfers in respect of research collaborations
These are recognised as income in the segment results of the operating segment receiving the income consistently with the accounting policies applied to third-party transactions and set out in these financial statements. Corresponding expenses are recorded in the other operating segment so that these eliminate at a Pharmaceuticals Division level.