Company: GLPG
Filing Date: 2025-03-27
Form Type: 20-F
Source: 0001558370-25-003806
Chunk: 186

Company: GALAPAGOS NV
Filing Date: 2025-03-27
Form: 20-F
Item: Item 5
Chunk 186
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 expenses.
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d/ Sales based milestone payments and royalties
License and collaboration agreements include sales-based royalties, including commercial milestone payments based on the level of sales, and the license has been deemed to be the predominant item to which the royalties relate. Related revenue is recognized as the subsequent underlying sales occur.
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(iv) allocate the transaction price to the performance obligations in the contract
We allocate the transaction price to each performance obligation identified in the contract based upon the stand-alone selling price. The stand-alone selling price of each performance obligation is estimated by using one of the following methods: adjusted market assessment approach, the expected cost plus a margin approach or the residual approach. If management assesses that there is only one single performance obligation, the entire transaction price would be allocated to this performance obligation.
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(v) recognize revenue when (or as) the entity satisfies a performance obligation
Revenue is recognised when our customer obtains control of the goods and/or services foreseen in the contracts. The control can be transferred over time or at a point in time – which result in recognition of revenue over time and at a point in time. 
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In case of revenue recognition over time, we use either an input model that considers estimates of the percentage of total research and development costs that are completed each period compared to the total estimated costs (percentage of completion method) to measure the progress of the satisfaction of the underlying performance obligation (which is the method applied for the filgotinib performance obligation). In other cases, depending on specific circumstances, we recognize revenue on a straight-line basis over the estimated term of the performance obligation (which is the method applied for the performance obligation related to our drug discovery platform).
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Cost of sales
Our cost of sales includes primarily the purchase cost of the goods sold and transportation costs.
R&D expenditure
Expenses on R&D activities are recognized as an expense in the period in which the expense is incurred.
Our R&D expenditure consists of costs associated with our R&D activities such as:

●   personnel costs associated with employing our team of R&amp;D staff, including salaries, social security costs, and share-based compensation expenses;
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●   disposables and lab consumables used in the conduct of our in-house research programs;
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●   payments for research work conducted by sub-contractors and sponsorship of work by our network of academic collaborative research scientists;
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●   subcontracting costs paid to contracted research organizations, or CROs, for our preclinical studies or