Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover is reduced for estimated customer returns, rebates and other similar allowances.
Sale of Motor Vehicles
Revenue from the sale of new and used motor vehicles is recognised at the point in time when control of the vehicle transfers to the customer, which is generally when:
- The vehicle has been delivered or made available for collection;
- Legal title has passed to the customer;
- The significant risks and rewards of ownership have transferred; and
- The amount of revenue can be measured reliably and collection is probable.
Finance and Commission Income
Commission income earned from arranging vehicle finance, insurance, warranties, or other ancillary products is recognised when the related service has been performed and the right to receive the commission is established.
Part-Exchange Transactions
Where vehicles are sold with a part-exchange:
- Turnover is recognised at the gross selling price of the vehicle sold; and
- The part-exchange vehicle is recognised as stock at its fair value at the date of the transaction.
Deposits
Customer deposits received in advance of vehicle delivery are recognised as deferred income (liability) and included in turnover only when the sale is completed and control transfers to the customer.
Returns and Cancellations
Revenue is recognised net of expected returns and cancellations, where applicable. Any refund liabilities are recognised when a refund is expected.