the consolidated statements of income when incurred. Internally generated development expenses are recognised  as an intangible asset only if the capitalisation criteria under  IAS 38 are satisfied. Therefore, internal expenditure incurred  for ongoing internal development projects is not capitalised  until marketing approval is obtained from the regulatory author- ities in a major market, which is considered the time at which  the criteria of capitalisation under IAS 38 are met. In addition to the Group’s internal research and development  activities, the Group has entered into research and development  collaboration agreements with some alliance partners. The  expenses and income associated with the settlement of the  expenditure incurred for the research and development collabo- ration activities are accounted for as research and development  expenses on an accrual basis in the same way as research  and development expenses incurred within the Group. Finance income mainly comprises interest income, dividend  income, and gain on sales of financial instruments. Interest  income is recognised using the effective interest method.  Dividend income is recognised when the right to receive pay- ment is established. Gain on sales of financial instruments is  recognised when the financial assets are derecognised. Financial expenses mainly comprise interest expense, fees,  loss on sales of financial instruments, and impairment losses  for financial assets. Interest expense is recognised when  incurred using the effective interest method. Income tax expense is comprised of current and deferred  taxes, and recognised in profit or loss, except for taxes related  to business combinations and to items that are recognised in  other comprehensive income or directly in equity. Current taxes are calculated at the amount expected to be  paid to or recovered from the taxation authority by applying the  statutory tax rate and tax laws enacted or substantially  enacted at the end of the fiscal year. Deferred tax assets and deferred tax liabilities are recog- nised for temporary differences between the carrying amounts  of certain assets or liabilities in the consolidated statements of  financial position and their tax base. However, deferred tax  assets and liabilities are not recognised for: Costs incurred after initial recognition are recognised as an  asset, as appropriate, only when it is probable that future  economic benefits associated with the asset will flow to the  Group and its cost can be reliably measured. Costs of  Property, plant, and equipment is measured by using the cost  model and is stated at cost less accumulated depreciation and  accumulated impairment losses. The cost of items of property,  plant and equipment includes costs directly attributable to the  acquisition and the initial estimate of costs of dismantling and  removing the items and restoring the site on which they are  located. Basic earnings per share are calculated by dividing profit for  the year attributable to owners of the parent by the weighted- average number of ordinary shares outstanding during the  year, adjusting treasury shares. For the purpose of calculating  diluted earnings per share, profit for the year attributable to  owners of the parent and the weighted average number of  shares outstanding, adjusting treasury shares, is calculated for  the effects of all dilutive potential ordinary shares. Deferred tax assets and deferred tax liabilities are offset if the  Group has a legally enforceable right to offset current tax  assets against current tax liabilities, and they are related to  income taxes levied by the same taxation authority on either  the same taxable entity or different taxable entities which  intend to settle current tax assets and liabilities on a net basis. Deferred tax assets and deferred tax liabilities are measured  at the tax rates that are expected to apply to the period when  the asset is realised or the liability is settled, based on tax rates  and tax laws that have been enacted or substantively enacted  by the end of the fiscal year. Deferred tax assets are recognised to the extent that it is  probable that taxable profits will be available against which  deductible temporary differences, unused tax losses, and  unused tax credits can be utilised. · deductible temporary differences associated with investments  in subsidiaries, associates and interests in joint arrangements  when it is not probable that the temporary difference will  reverse in the foreseeable future or there will not be sufficient  taxable profits against which the deductible temporary  differences can be utilised. · taxable temporary differences associated with investments in  subsidiaries, associates, and interests in joint arrangements  when the Group is able to control the timing of the reversal of  the temporary difference and it is probable that the temporary  difference will not reverse in the foreseeable future. · taxable temporary differences arising from the initial recognition  of goodwill. · taxable or deductible temporary differences arising from the  initial recognition of assets and liabilities in a transaction other  than a business combination that affects neither accounting  profit nor taxable profit (tax loss). (8) Earnings per share (9) Property, plant and equipment (7) Income tax (6) Finance income and finance expense Financial Section Annual Report 2014 _  Astellas Pharma Inc.  111