Note 11. Research and Development

Research and development costs are expensed when incurred and include direct materials and labor, depreciation, contracted services and other costs associated with developing new products and significant enhancements to existing products. Research and development expense for the fiscal years ended March 31, 2012, 2011, and 2010 are reflected below:


			March 31,
	2012		2011		2010
	(in $000’s)
Internally funded	$	25,715	$	25,735	$	25,434
Incurred under government contracts and grants		1,444		942		520

	$	27,159	$	26,677	$	25,954