| (21) | Revenue Recognition |
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. The specific criteria described below must also be met before revenue is recognized.
Sales revenue
The Company manufactures semiconductors for creditworthy customers based on their design specifications, pursuant to manufacturing agreements and/or purchase orders at contractual prices. The Company ships wafers mainly under the trade term, Free Carrier (FCA), through which the title and risk of loss for the wafers are transferred to the customers upon delivery to carriers approved by the customers. Sales revenue is recognized at this point, having also fulfilled all of the following criteria pursuant to IAS 18, paragraph 14:
| a. | the significant risks and rewards of ownership of the goods have been transferred to the customer; |
| b. | neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold have been retained; |
| c. | the amount of revenue can be measured reliably; |
| d. | it is probable that the economic benefits associated with the transaction will flow to the entity; and |
| e. | the costs incurred or to be incurred in respect of the transaction can be measured reliably. |
Sales revenue is measured at the fair value of the consideration received or receivable, net of sales returns and discounts, which are estimated based on customer complaints, historical experience and other known factors. Sales returns and discounts are recorded in the same period in which sales are made.
Interest income
For financial assets measured at amortized cost (including held-to-maturity financial assets) and financial assets at fair value through profit or loss, interest income is recorded using the effective interest rate and recognized in profit or loss.
Dividends
Revenue is recognized when the Company’s right to receive the dividends is established, which is generally when stockholders approve the dividend.