Revenue
Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods supplied, less inter-company revenue, estimated rebates, returns, settlement discounts and sales tax.
Sale of goods
Revenue for the sale of goods is recognized when all of the following conditions are satisfied:
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• | The significant risks and rewards of ownership of the goods have been transferred to the buyer; |
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• | The Group retain neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; |
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• | The amount of revenue can be reliably measured; |
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• | It is probable that future economic benefits will flow to the entity; and |
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• | The costs incurred or to be incurred in respect of the transaction can be measured reliably. |
Royalties
Royalty revenue is recognized on an accrual basis in accordance with the substance of the relevant agreements, provided that it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably.
Tooling revenue
Revenue recognition associated with tooling contracts is recognized in proportion to the progress and costs incurred as a percentage of total expected costs. Payments made in advance of work performed and raw materials purchased for which no work has been performed are excluded from the calculations and are accounted for as deferred income and inventory respectively. Where customer acceptance is on final completion and handover of the tool, revenue is recognized at the point the customer accepts ownership of the tool.
