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ANNUAL REPORT 2013 61
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(b) Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and
rendering of services, in the ordinary course of the Group’s activities, net of goods and services tax,
rebates and discounts, and after eliminating sales within the Group. Revenue is recognised as follows:
(1) Sale of goods
Revenue from sale of goods is recognised when a Group entity has transferred to the customer
the signifcant risks and rewards of the ownership of the goods, and collectibility of the related
receivables is reasonably assured.
(2) Rendering of services
Revenue from services is recognised upon rendering of services.
(3) Interest income
Interest income is recognised on a time proportion basis using the effective interest method.
(4) Dividend income
Dividend income from subsidiaries, associated companies and available-for-sale fnancial assets
is recognised when the right to receive payment is established.
(5) Rental income
Rental income from operating leases on investment properties is recognised on a straight-line basis
over the lease term when collectibility of the related receivable is reasonably assured.
(c) Group accounting
(1) Subsidiaries
(i) Consolidation
Subsidiaries are entities over which the Group has power to govern the fnancial and operating
policies so as to obtain benefts from its activities, generally accompanied by a shareholding
giving rise to a majority of the voting rights. The existence and effect of potential voting rights
that are currently exercisable or convertible are considered when assessing whether the Group
controls another entity. The Group also assesses existence of control where it does not have
more than 50% of the voting power but is able to govern the fnancial and operating policies
of the entities.
Subsidiaries are consolidated from the date on which control is transferred to the Group. They
are de-consolidated from the date on which control ceases.
In preparing the consolidated fnancial statements, transactions, balances and unrealised gains
on transactions between group entities are eliminated. Unrealised losses are also eliminated
but are considered an impairment indicator of the asset transferred. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.