4.14 Revenue recognition
Revenue includes the fair value of the goods sold or services rendered, excluding any related taxes and deducting any discounts or returns as a reduction in the amount of the transaction. Income is recognized when all of the following conditions are met:
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the Company has transferred to the buyer the significant risks and rewards of ownership of the goods; |
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the Company retains 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 measured reliably; |
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it is probable that the economic benefits associated with the transaction 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. |
In relation to transactions in the electrometallurgy business, ownership is considered to be transferred at the time agreed upon with customers based on the Incoterm clauses applicable to the transaction.
Income from the energy business is recognized based on the power generated and put on the market at regulated prices, being recognized income when the energy produced is transferred to the system.
Accordingly, interest income is recognized using the effective interest method. Dividend income is also recognized when the shareholder’s rights to receive payment have been established.