Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and
the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or
receivable, excluding discounts, rebates, value added tax and other sale taxes. The following criteria must also be met before revenue is recognised.
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
-the company has transferred the significant risks and rewards of ownership to the buyer;
-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 company will receive the consideration due under the transaction;and
-the costs incurred or to be incurred in respect of the transaction can be measured reliably;
Rendering of services
Revenue from the rendering of services is recognised by reference to the stage of completion of the contract.
-the amount of revenue can be measured relaibly;
- it is probable that the company will receive the consideration due under the contract;
- the stage of completion of the contract at the end of the reporting period can be measured reliably; and
-the costs incurred and the costs to complete the contract can be measured reliably.