Sample Disclosure – Accounting Policy On Revenue Recognition (10 September 2009)
Revenue is measured at the fair value of the consideration received or receivable net of sales tax, trade discounts and customer returns.
Sale of goods
Revenue from sale of goods is recognised when the following conditions are satisfied:
- the Company has transferred to the buyer the significant risks and rewards of ownership of the goods;
- the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
- the amount of revenue can be measured reliably;
- it is probable that the economic benefits associated with the transaction will flow to the entity; and
- the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Dividend and interest income
Dividend income represents gross dividends from unquoted investments and is recognised when the shareholder’s rights to receive payment is established. Interest income is accrued on a time basis, by reference to the principal outstanding and at the interest rate applicable.
Rental income is accrued on a time basis, by reference to the agreements entered.