Common use of Principles of Reporting Clause in Contracts

Principles of Reporting. Determination of Operating Profits (Losses), for a Profit Sharing Product will be based on each Party’s respective financial information. If the Parties have determined the terms for ex-U.S. Operating Profits (Losses), the Commercializing Party may choose to provide a consolidated worldwide pro forma financial statement for itself and its Sublicensees rather than separate financial statements for itself and its Sublicensees) in the following reporting format. The interpretation of the defined terms in such report shall be in accordance with GAAP and this Agreement. Gross Sales less Sales Returns and Allowances = Net Sales less Cost of Sales = Gross Profits less Marketing Costs less Sales Costs less Development Costs less Other Operating Income/Expense less Distribution Costs less General and Administrative Costs = Operating Profits or Losses If necessary, a Party will make the appropriate adjustments to the financial information it supplies under the Agreement to conform to the above format of reporting results of operations. Without limiting the foregoing, prior to the time that Gross Sales are obtained and if there are no incurred and mutually agreed costs related to sales or sales support, the Parties may eliminate the above line items related to sales and the support of sales, and the costs thereof, and use only those terms relevant to the sharing of Development Costs.