NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
74
THE STRAITS TRADING COMPANY LIMITED
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.27 INCOME RECOGNITION
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
received or receivable, taking into account contractually defined terms of payment and excluding discounts, rebates, taxes
or duty. The Group assesses its revenue arrangements to determine if it is acting as principal or agent.
Interest income is recognised as interest accrues (using the effective interest method) unless collectibility is in doubt.
Revenue from sale and delivery of refined tin metal and by-products is recognised upon transfer of significant risks and
rewards of ownership to the buyer. Revenue is not recognised to the extent where there are significant uncertainties
regarding recovery of the consideration due, associated costs or the possible return of goods.
Revenue from tin warrant and other service charges are recognised upon performance of services.
Rental income is accounted for on a straight-line basis over the lease terms. The aggregate costs of incentives provided to
lessees are recognised as a reduction of rental income over the lease term on a straight-line basis.
Profits from sale of marketable securities are recognised upon conclusion of the contract for sale.
Profits from sale of completed properties are recognised when the significant risks and rewards of ownership of the
properties have been transferred to the buyer.
Dividend income from investments is recognised when the Group’s right to receive payment is established.
Revenue from sale of properties in the course of development
Where property is under development and agreement has been reached to sell such property when construction is
complete, the Directors consider whether the contract comprises:
–
A contract to construct a property; or
–
A contract for sale of a completed property.
(a)
Where a contract is judged to be for construction of a property, revenue is recognised using the percentage of
completion method as construction progresses.
