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Consolidated Financial Report |
EXPLANATORY NOTES
2014 Annual Report
Prysmian Group
152
B.20 REVENUE RECOGNITION
Revenue is recognised at the fair value of the consideration
received for the sale of goods and services in the ordinary
course of the Group’s business. Revenue is recognised net of
value-added tax, expected returns, rebates and discounts.
Revenue is accounted for as follows:
(a) Sales of goods
Revenue from the sale of goods is recognised when the risks
and rewards of the goods are transferred to the customer;
this usually occurs when the goods have been dispatched
or delivered to the customer and the customer has accepted
them.
(b) Sales of services
The sale of services is recognised in the accounting period
in which the services are rendered, with reference to the
progress of the service supplied and in relation to the total
services still to be rendered.
In both cases, revenue recognition depends on there being
reasonable assurance that the related consideration will be
received.
The method of recognising revenue for construction contracts
is outlined in Section B.13 Construction contracts.
B.21 GOVERNMENT GRANTS
Government grants are recognised on an accrual basis in
direct relation to the costs incurred when there is a formal
resolution approving the allocation and, when the right
to the grant is assured since it is reasonably certain that
the Group will comply with the conditions attaching to its
receipt and that the grant will be received.
(a) Grants related to assets
Government grants relating to investments in property,
plant and equipment are recorded as deferred income in
“Other payables”, classified under current and non-current
liabilities for the respective long-term and short-term
portion of such grants. Deferred income is recognised in
“Other income” in the income statement on a straight-line
basis over the useful life of the asset to which the grant
refers.
(b) Grants related to income
Grants other than those related to assets are credited to the
income statement as “Other income”.
B.22 COST RECOGNITION
Costs are recognised when they relate to assets and services acquired or consumed during the year or to make a systematic
allocation to match costs with revenues.