(k) Revenue recognition
The Company earns revenue from four sources: the Reducer, product sales, contract manufacturing and consulting services. Revenues from these four sources are recognized as follows:
Revenue from the sale of goods is recognized when the Company has transferred to the buyer the significant risks and rewards of ownership of the goods, the Company retains neither continuing managerial involvement 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. For consulting services, revenue is recognized when 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 stage of completion and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Reducer, Product sales and Contract manufacturing
For the Reducer, product sales and contract manufacturing, these criteria are met upon time of shipment at shipping point.
Consulting services
For consulting services, these criteria are met as the services are delivered under the terms of the related consulting services contract.
Product sales ceased in 2015 and contract manufacturing and consulting services ceased at the end of 2017.