Turnover is measured at the fair value of the consideration received or receivable, net of VAT and trade discounts. Turnover is also measured net of the estimated value of customer returns and volume rebates.Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
● the company has transferred all the significant risks and rewards of ownership of the goods to the buyer;
● the company retains neither continuing managerial involvement, nor effective control, over the goods to the degree usually associated with ownership;
● the amount of the revenue can be reliably measured;
● it is probable that the economic benefits associated with the sale will flow to the entity; and
● the costs (to be) incurred in respect of the transaction can be reliably measured.
Turnover is recognised on despatch of goods which is the point at which the company transfers the significant risks and rewards of ownership of the goods to the customer. The company retains legal title of the goods until the customer pays, but this does not constitute a retention of the significant risks and rewards of ownership. Amounts received in advance of shipping goods to customers are recognised as deferred income and presented within creditors amounts falling due within one year.