This Appendix explains the scope of the R&D Scoreboard, the definitions which underpin it and the limitations that result from the scope and definitions
The UK850 and G1400 have been prepared on the basis of annual reports and consolidated accounts received by Company Reporting Ltd up to and including 28th July 2008. Annual reports which have a year-end older than 30 months from this cut-off date or a publication date older than 24 months from cut-off date are excluded.
For companies that have prepared an annual report and accounts for a period not equal to 12 months, the figures in the R&D Scoreboard have been "annualised" to reflect a 12 month period. To ensure figures are not misrepresented, annual report and accounts for a period less than four months are not "annualised" and the companies are excluded from the Scoreboard.
For the UK850, the accounts used are the consolidated group accounts of the ultimate UK parent. Companies which are subsidiaries of other UK companies are not ranked separately, except for:
- some significant foreign owned companies that take advantage of the EC 7th Directive non-consolidation provision;
- companies that disclose R&D costs where the ultimate consolidating parent does not; and
- the ultimate UK parent does not produce consolidated accounts or has never published accounts.
For the G1400, the accounts used are the consolidated group accounts of the ultimate parent company. Companies which are subsidiaries of any other company are not ranked separately. These bases seek to maximise completeness while at the same time minimising double counting.
The R&D investment included in the Scoreboard is the cash investment which is funded by the companies themselves. It excludes R&D undertaken under contract for customers such as governments or other companies. It also excludes, where possible, the companies’ share of any associated company or joint venture R&D investment. However, joint venture companies that publish accounts and disclose R&D are included. Where part or all of R&D costs have been capitalised, to calculate the cash investment the additions to the appropriate intangible assets are included in the Scoreboard as R&D investment and any amortisation eliminated. For some foreign-owned UK companies, R&D investment is incurred within the UK but funded by the parent or another group company. In such cases, where the R&D is noted in the UK company report, the scope of R&D investment included in the UK850 is broadened to include the activity taking place in the UK but funded from overseas.
Data on previous years’ R&D investment are taken from the appropriate year’s annual report and accounts. R&D investment for previous years does not take into account restated figures. Where a significant event, such as a merger or acquisition has taken place, comparative figures from the latest accounts are taken to give a more accurate reflection of company performance. In the case of mergers and acquisitions earlier year figures are taken in respect of the larger of the two constituent companies.
Where a company has reported under IFRS and disclosed a R&D figure for the first time, comparative figures are taken to give a R&D figure for the previous year and a one year growth rate. Where a company previously reported under its domestic GAAP and has disclosed under IFRS for the first time in the current year, and where there is a material difference in R&D between the two years, comparative figures have been entered to more accurately reflect the R&D spend for each year. Where there exists an information discontinuity between the current year and previous year’s comparative figure R&D disclosure, a "n/a" has been entered for the previous year’s R&D.
