BAKERTECHNOLOGYLIMITED
ANNUALREPORT2013
97
Notes to the
Financial Statements
for the financial year ended 31December 2013
2.
Summaryof significantaccounting policies (cont’d)
2.19
Construction contracts and revenue (cont’d)
(b)
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured, regardless of when the payment is made. Revenue is measured at the fair value of
consideration receivedor receivable, taking into account contractually defined terms of payment and excluding taxes or
duty. TheGroupassesses its revenuearrangements todetermine if it is actingasprincipal or agent. The following specific
recognition criteriamust also bemet before revenue is recognised:
(i)
Sales of goods
Revenue from sales of goods is recognised upon the transfer of significant risk and rewards of ownership of the
goods to the customers, usually ondelivery of goods.
Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the
consideration due, associated costs or the possible returnof goods.
(ii)
Renderingof services
Revenue from rendering of services is recognised by reference to the stage of completion at the end of the
reportingperiod.Where the contract outcome cannot bemeasured reliably, revenue is recognised to the extent of
the expenses recognised that are recoverable.
(iii)
Interest income
Interest income is recognised using the effective interestmethod.
(iv)
Dividend income
Dividend income is recognisedwhen theGroup’s right to receive payment is established.
(v)
Rental income
Rental income arising from operating leases is accounted for on a straight-line basis over the lease terms. The
aggregate costsof incentivesprovided to lessees are recognisedas a reductionof rental incomeover the lease term
on a straight-line basis.
2.20
Taxes
(a)
Current income tax
Current income tax assets and liabilities for the current and prior periods aremeasured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those
that are enactedor substantively enacted at the endof the reportingperiod, in the countrieswhere theGroupoperates
andgenerates taxable income.
Current income taxes are recognised in the profit or loss except to the extent that the tax relates to items recognised
outside profit or loss, either in other comprehensive income or directly in equity. Management periodically evaluates
positions taken in the tax returnswith respect to situations inwhichapplicable tax regulationsare subject to interpretation
and establishes provisionswhere appropriate.
