5. Development costs

Tieto’s offering development costs amounted to around EUR 75 million in 2016, representing 5.0% of Group sales (EUR 60 million in 2015, representing 4.1% of net sales). These costs comprise service and product development focusing on, for example, industry-specific solutions, Customer Experience Management and Security Services, as well as cloud services. Additionally, the costs for related internal development, e.g. automation in managed services, are included in this amount. Development costs for major new business concepts and software products are capitalized as intangible assets if they fulfil the requirements stated in the accounting principles. No development costs were capitalized for either 2016 or 2015.