3.21 Revenue recognition
Sales of products are recognized as revenue upon delivery to the customer, and once all the following conditions are satisfied:
| • | The Company has transferred to the buyer the significant risks and rewards of ownership of the goods; |
| • | The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; |
| • | The amount of revenue can be measured reliably; |
| • | It is probable that the economic benefits associated with the transaction will flow to the Company; and |
| • | The costs incurred or to be incurred in respect of the transaction can be measured reliably. |
All of the above conditions are typically met at the point in time that goods are delivered to the customer at the customers’ facilities. Net sales reflect units delivered at list prices reduced by promotional allowances, discounts and the amortization of the agreements with customers to obtain the rights to sell and promote the Company’s products.
Rendering of services and other
Revenue arising from services relating to sales of waste material and packing of raw materials are recognized in the other operating income caption in the consolidated income statement.
The Company recognized these transactions as revenues in accordance with the requirements established in the IAS 18, delivery of goods and rendering of services, which are:
| a) | The amount of revenue can be measured reliably; |
| b) | It is probable that the economic benefits associated with the transaction will flow to the entity; |
| c) | The stage of completion of the transaction at the end of the reporting period can be measured reliably; and |
| d) | The costs incurred for the transaction and the costs to complete the transaction can be measured reliably. |
Interest income revenue arising from the use by others of entity’s assets yielding interest is recognized once all the following conditions are satisfied:
| • | It is probable that the economic benefits associated with the transaction will flow to the entity; and |
| • | The amount of the revenue can be measured reliably. |
For all financial instruments measured at amortized cost and interest bearing financial assets classified as available-for- sale, interest income or expense is recorded using the effective interest rate (“EIR”), which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability. The related interest income is included in the consolidated income statements.