Merck 2014 Annual Report Download - page 199

194 CONSOLIDATED FINANCIAL STATEMENTS → Notes to the Group accounts
(26) MARKETING AND SELLING EXPENSES
Marketing and selling expenses comprised the following:
€ million 2014 2013
Sales force – 809.3 – 789.8
Internal sales services – 613.6 – 598.7
Sales promotion – 469.4 – 458.4
Logistics – 412.6 – 390.7
Amortization of intangible assets1– 719.0 – 762.0
Other marketing and selling expenses – 81.0 – 88.9
Marketing and selling expenses1– 3,104.9 – 3,088.5
1 The disclosure of amortization of intangible assets (excluding software) has been changed. See Note “Accounting and measurement principles”.
Amortization of intangible assets was attributable to marketing
approvals, patents, licenses and similar rights, brands, trademarks
and other, which could be functionally allocated to Marketing and
Selling.
The breakdown of marketing and selling expenses by division
is presented in the Segment Reporting (see Note [51]).
(27) ROYALTY, LICENSE AND COMMISSION
EXPENSES
In 2014, royalty and license expenses amounted to €160.5 million
(2013: €212.8 million) and commission expenses totaled €377.0
million (2013: €354.2 million).
The sales-dependent royalty payments represented selling
expenses and were expensed in the period in which they were
incurred. Of significance here are the marketing rights to Erbitux®
outside the United States and Canada, for which expenses totaling
€84.7 million (2013: €80.9 million) were incurred in 2014.
Co-marketing agreements lead to sales-dependent commission
payments that are expensed in the period in which they are in-
curred. The commission expenses incurred related mainly to the
marketing of Rebif® in the United States, for which expenses of
€ 314.6 million were incurred in 2014 (2013: € 302.4 million).
These also represented exclusively selling expenses.
The breakdown of royalty, license and commission expenses
by division is presented in the Segment Reporting (see Note [51]).
(28) ADMINISTRATION EXPENSES
Personnel costs and material expenses of management and ad min-
istrative functions were recorded under this item unless charged to
other functional costs as internal services.
The breakdown of administration expenses by division is pre-
sented in the Segment Reporting (see Note [51]).
(29) RESEARCH AND DEVELOPMENT COSTS
Research and development costs increased in 2014 to €1,703.7
million (2013: € 1,506.6 million). Amortization of intangible
assets (excluding software) that had been attributable to research
and development costs was allocated to this functional area for
the first time in 2014.
Reimbursements for research and development amounting to
€18.4 million (2013: €15.0 million) were offset against research
and development costs. This figure also included government sub-
sidies of €5.9 million (2013: €8.9 million).
The breakdown of research and development costs by division
and region is presented in the Segment Reporting (see Note [51]).