Trade accounts receivable (construction contracts in progress)

 (1,514) 

 – 

Contract assets

 – 

Inventories

Deferred tax assets

Current and non-current deferred revenue

 (75,294) 

 – 

Current and non-current contract liabilities

 – 

 (76,643) 

 (76,643) 

Accrued expenses

 (289) 

Current provisions

Sales

 (1,045) 

Cost of sales

 (133,423) 

 (132,006) 

Income taxes

 (5,376) 

 (36) 

 (5,412) 

Earnings per share

 Basic earnings per share (CHF/share)

 Diluted earnings per share (CHF/share)

Sale of complex instruments

The sale of complex instruments generally follows the same principles as the sale of standard instruments. However, as the sale of a complex instrument requires material installation and application work at the customer’s site, control of the asset is only transferred and accordingly revenue recognized upon the written acceptance by the customer.

For sales orders with multiple instruments and high integrations costs, the Group determines the number of performance obligations individually and assesses whether the performance obligation(s) is/are satisfied over time. For revenue to be recognized over time, the following criteria must be fulfilled cumulatively: The Group’s performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date.

Sale of customized instruments

(‘Partnering Business’)

The sale of customized instruments comprises the development and supply of instruments with a customer-specific design. The development (adaption of existing Tecan-technology to the customer’s specifications) and supply of the instruments is generally considered as one performance obligation due to the limited usability of and control over the pure development result for the customer.

Therefore, the related customer-specific development costs are capitalized in the position inventories as part of the production costs. Once the development is completed the customer requests the units with individual purchase orders. The Group recognizes the corresponding development costs in cost of sales upon fulfillment of the individual purchase orders.

Engineering services without delivery of instruments

Engineering services are generally considered as one performance obligation. Revenue is recognized upon finalization of the project (at a point in time).

For larger engineering orders the Group assesses whether the performance obligation is satisfied over time. For revenue to be recognized over time, the following criteria must be fulfilled cumulatively: The Group’s performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date.

Performance obligations satisfied over time – method of revenue recognition and presentation (sale of complex instruments and engineering services)

The progress is measured by using a cost-to-cost approach: costs incurred for the work performed to date in proportion to the estimated total project costs. According to the progress, pro rata sales are recognized in the statement of profit or loss. In the balance sheet, projects in progress – netted against customers’ advances – are recognized as net assets (included in the position ‘contract assets’) or net liabilities (included in the position ‘contract liabilities’).

When it is probable that the total costs will exceed contract revenue, the rules of IAS 37 – ‘Onerous Contracts’ are applied.

Service contracts

Revenue form service contracts is recognized over time based on the time elapsed.

Warranty obligations

The Group provides standard warranties for the repair of defects that existed at the time of sale, as required by law. These warranties qualify as assurance-type warranties under IFRS 15, which the Group accounts for under IAS 37 ‘Provisions’.

In addition, the Group offers warranty extensions to its customers. Such warranty extensions are accounted for as service-type warranties according to IFRS 15, representing separate performance obligations to which the Group allocates a portion of the consideration based on the relative stand-alone selling price. For these service-type warranties, revenue is recognized over time based on the time elapsed.

Bundles of goods and services

Typically, instruments are sold together with other goods and services. The sale of other goods such as spare parts or consumables and services such as additional training or application work that are part of the same contract with a customer (bundles of goods and services), but qualify for the identification of separate performance obligations, are recognized separately from the sale of the instrument as revenues. The consideration (including any discounts) is allocated in proportion to the relative stand-alone selling prices of the identified performance obligations.

Financial assets at amortized cost with 
significant financing component

– Rent and other deposits

These financial assets are initially measured at fair value plus transaction costs that are directly attributable to their acquisition.

Subsequently the financial instrument is measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains/losses and impairment are recognized in profit or loss. Any gain or loss on de-recognition is recognized in profit or loss.

Financial assets and liabilities at fair value through profit or loss (FVTPL)

– Derivatives

– Contingent considerations

These financial assets and liabilities are initially measured at fair value without any transaction costs, the latter being directly expensed. 

Subsequently these financial instruments continue to be measured at fair value. Net gains and losses are recognized in profit or loss.

The Group uses derivative financial instruments to economically hedge certain exposures to foreign exchange rate risks. Hedge accounting is not applied.

Financial assets at fair value through other comprehensive income (FVOCI)

– Unquoted equity instrument

This category only includes equity instruments which the Group intends to hold for the fore­seeable future. The classification is determined upon initial recognition on an investment­-by-investment basis and is irrevocable.

The financial asset is initially measured at fair value plus transaction costs that are directly attributable to its acquisition.

Subsequently the financial instrument continues to be measured at fair value. Net gains and losses are recognized in other comprehensive income and are not recycled to profit or loss on de-recognition. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment.

Financial liabilities at amortized cost 
without significant financing component

– Current bank liabilities

– Payables and accrued expenses

These financial liabilities are initially measured at the transaction price (nominal value).

Subsequently these financial instruments continue to be measured at the transaction price. Foreign exchange gains/losses are recognized in profit or loss. Any gain or loss on de-recognition is recognized in profit or loss.

Financial liabilities at amortized cost with significant financing component

– Bank loans

These financial liabilities are initially measured at fair value plus transaction costs that are directly attributable to their acquisition.

Subsequently these financial instruments are measured at amortized cost using the effective interest method. Interest expenses and foreign exchange gains/losses are recognized in profit or loss. Any gain or loss on de-recognition is recognized in profit or loss.