The major components of the reconciliations of profit and loss  and comprehensive income for the year ended 31 March 2013  are as follows: Notes to reconciliation of profit or loss and comprehensive income for the year ended 31 March 2013 Certain royalty expenses associated with sales included in  “Selling, general and administrative expenses” under Japanese  GAAP have been included in “Cost of sales” under IFRS. (Recognition and measurement) Under IFRS, sales and cost of sales arising from transactions  where the Group is acting as an agent are presented on a net  basis. As a result, the amount of “Cost of sales” has  decreased by ¥21,031 million. Certain costs of sales rebates were included in “Selling, general  and administrative expenses” under Japanese GAAP. However,  they are deducted from “Sales” under IFRS. (Recognition and measurement) Under Japanese GAAP, sales arising from transactions where  the Group was acting as a principal or agent were presented  on a gross basis. However, under IFRS, sales are presented on  a net basis when the Group is acting as an agent. As a result,  the amount of “Sales” has decreased by ¥21,031 million. Under Japanese GAAP, actuarial gains and losses associ- ated with retirement benefits were amortised mainly on a  straight-line basis from the following year in which they were  incurred over the average remaining service years of employ- ees. However, under IFRS, actuarial gains and losses are fully  recognised in other comprehensive income when they are  incurred as remeasurements of defined benefit plans. As a  result, the amount of “Selling, general and administrative  expense” has decreased. Research and development expenses included in “Selling,  general and administrative expenses” under Japanese GAAP  have been presented separately as “Research and development  expenses” under IFRS. As a result, the amount of “Amortisation of intangible assets”  has increased by ¥2,752 million. Under Japanese GAAP, costs associated with the in-licensing  of products and technologies incurred before filing an applica- tion for approval from regulatory authorities were recognised  as research and development expenses. However, under  IFRS, those costs that satisfy certain criteria are capitalised as  intangible assets. As a result, the amount of “Research and  development expenses” has decreased. Amortisation of intangible assets included in “Selling, general  and administrative expenses” under Japanese GAAP has been  presented separately as “Amortisation of intangible assets”  under IFRS. Under Japanese GAAP, costs associated with the in-licensing  of products and technologies incurred before filing an applica- tion for approval from regulatory authorities were recognised  as research and development expenses, but under IFRS,  those costs that satisfy certain criteria are capitalised as intan- gible assets and amortised over their estimated useful lives on  a straight-line basis. Also, the Group revised the useful life of  certain marketing rights upon adoption of IFRS. Financial Section Research and development expenses and amortisation of  intangible assets included in “Selling, general and administra- tive expenses” under Japanese GAAP have been presented  separately as “Research and development expenses” and  “Amortisation of intangible assets” under IFRS. Certain royalty expenses associated with sales included in  “Selling, general and administrative expenses” under Japanese  GAAP have been included in “Cost of sales” under IFRS. Certain sales rebates were included in “Selling, general and  administrative expenses” under Japanese GAAP. However,  they are deducted from “Sales” under IFRS. Restructuring costs and losses from settlement of litigation  included in “Selling, general and administrative expenses”  under Japanese GAAP have been included in “Other expense”  under IFRS. Annual Report 2014 _  Astellas Pharma Inc.  157 With regard to the cost formula of inventories, the Company  and its domestic subsidiaries were mainly using the average  method. However, the Group applied the first-in, first-out  (FIFO) method under IFRS. As a result, the amount of “Cost of  sales” has increased. A Sales B Cost of sales (Presentation) (Presentation) (Presentation) D Research and development expenses C Selling, general and administrative expenses (Presentation) (Presentation) E Amortisation of intangible assets (Recognition and measurement) Goodwill was amortised over a specified period under Japanese  GAAP while it is not amortised under IFRS. Consequently,  there has been a ¥10,318 million decrease in “Selling, general  and administrative expenses”. (Recognition and measurement) (Recognition and measurement)