Turnover is recognised in line with Section 23 of FRS 102 - Revenue Recognition to reflect the actual turnover of the company, which is providing a foreign exchange service and receiving either commission or profit on the exchange rates.
Turnover and other incomeTurnover is measured at the fair value of the consideration received or receivable.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.
Other income relates to rent and interest receivable. Rental income is recognised when the company is entitled to receive income based on the contractual agreement in force. Interest income is recognised using the effective interest method.