my.liuc.itmy.liuc.it/MatSup/2014/A86045/SM 3 Revenues- Accounting... · Web viewENI Revenues and...

SM 3 Revenues ndash Accounting policies

LrsquoOreal

Net sales

Net sales are recognised when the risks and rewards inherent to ownership of the goods have been transferred to the customer

Sales incentives cash discounts and product returns are deducted from sales as are incentives granted to distributors or consumers resulting in a cash outflow such as commercial cooperation coupons discounts and loyalty programmes

Sales incentives cash discounts provisions for returns and incentives granted to customers are recorded simultaneously to the recognition of the sales if they can be estimated in a reasonably reliable mannerbased mainly on statistics compiled from past experience and contractual conditions

Shell

Revenue recognition

Revenue from sales of oil natural gas chemicals and other products is recognised at the fair value of consideration received or receivable after deducting sales taxes excise duties and similar levies when the significant risks and rewards of ownership have been transferred which is when title passes to the customer For sales by Upstream operations this generally occurs when product is physically transferred into a vessel pipe or other delivery mechanism for sales by refining operations it is either when product is placed onboard a vessel or offloaded from the vessel depending on the contractually agreed terms and for wholesale sales of oil products and chemicals it is either at the point of delivery or the point of receipt depending on contractual conditions

Revenue resulting from the production of oil and natural gas from properties in which Shell has an interest with partners in joint arrangements is recognised on the basis of Shellrsquos working interest (entitlement method) Revenue resulting from the production of oil and natural gas under production-sharing contracts is recognised for those amounts relating to Shellrsquos cost recoveries and Shellrsquos share of the remaining production Gains and losses on derivative contracts and the revenue and costs associated with other contracts that are classified as held for trading purposes are reported on a net basis in the Consolidated Statement of Income Purchases and sales of hydrocarbons under exchange contracts that are necessary to obtain or reposition feedstock for refinery operations are presented net in the Consolidated Statement of Income

1

ENI

Revenues and costs

Revenues associated with sales of products and services are recognized when significant risks and rewards of ownership have passed to the customer or when the transaction can be considered settled and the associated revenue can be reliably measured In particular revenues are recognized for the sale of

bull crude oil generally upon shipment bull natural gas upon delivery to the customerbull petroleum products sold to retail distribution networks generally upon delivery to the service stations whereas all other sales of petroleum products are generally recognized upon shipment andbull chemical products and other products generally upon shipment

Revenues are recognized upon shipment when at that date significant risks are transferred to the buyer Revenues from crude oil and natural gas production from properties in which Eni has an interest together with other producers are recognized on the basis of Enirsquos net working interest in those properties (entitlement method) Differences between Enirsquos net working interest volume and actual production volumes are recognized at current prices at year end Revenues related to partially rendered services are recognized by reference to the stage of completion provided that (i) the amount of revenues can be measured reliably (ii) it is probable that the economic benefits associated with the transaction will flow to the entity (iii) the stage of completion of the transaction at the end of the reporting period can be measured reliably and (iv) the related costs can be measured reliably When the outcome of the transaction involving the rendering of services cannot be estimated reliably revenue is recognized only to the extent of the expenses recognized that are recoverable Revenues accrued during the year related to construction contracts are recognized on the basis of contractual revenues with reference to the stage of completion of a contract measured on the cost-to-cost basis For service concession arrangements (see item Intangible assets above) in which customers fees do not provide a reliable distinction between the compensation for constructionupdate of the infrastructure and the compensation for operating it and in the absence of external benchmarks revenues recognized during the constructionupdate phase are limited to the amount of the costs incurred Additional revenues derived from a change in the scope of work are included in the total amount of revenues when it is probable that the customer will approve the variation and the related amount Claims deriving from additional costs incurred for reasons attributable to the customer are included in the total amount of revenues when it is probable that the counterparty will accept them Tangible assets different from an infrastructure used in service concession arrangements transferred from customers (or constructed using cash transferred from customers) and used to connect them to a network to supply goods and services are recognized at their fair value as an offset to revenues When more than one

2

separately identifiable service is provided (for example connection to a network and supply of goods) the entity shall assess for which one service it receives the transferred asset from the customer and it shall consistently recognize a revenue when the connection is delivered or over the lesser period between the length of the supply and the useful life of the transferred asset Revenues are measured at the fair value of the consideration received or receivable net of returns discounts rebates bonuses and related taxation Award credits related to customer loyalty programs are recognized as a separate component of the sales transaction which grants the right to customers Therefore the portion of revenues related to the fair value of award credits granted is recognized as an offset to the item Other liabilities The liability is charged to the profit and loss account in the period in which the award credits are redeemed by customers or the related right is lost The exchange of goods and services of a similar nature and value do not give rise to revenues and costs as they do not represent sale transactions Costs are recognized when the related goods and services are sold or consumed during the year they are systematically allocated or when their future economic benefits cannot be identified Costs associated with emission quotas determined on the basis of the market prices are recognized in relation to the amount of the carbon dioxide emissions that exceed free allowances Costs related to the purchase of the emission rights are recognized as intangible assets net of any negative difference between the amount of emissions and the free allowances Revenues related to emission quotas are recognized when they are sold In case of sale if applicable the acquired emission rights are considered as the first to be sold Monetary receivables granted as a substitution of emission rights awarded free of charge are recognized as a contra to item Other income and revenues of the profit and loss account Operating lease payments are recognized in the profit and loss account over the length of the contract Payroll costs include stock options granted to managers consistent with their actual remunerative nature The instruments granted are recorded at fair value on the vesting date and are not subject to subsequent adjustments the current portion is calculated pro-rata over the vesting period17 The fair value of stock options is determined using valuation techniques which consider conditions related to the exercise of options current share prices expected volatility and the risk-free interest rate The fair value of stock options is recognized as a contra to the equity item Other reserves The costs for the acquisition of new knowledge or discoveries the study of products or alternative processes new techniques or models the planning and construction of prototypes or in any case costs incurred for other scientific research activities or technological development which cannot be capitalized (see item Intangible assets above) are included in the profit and loss account when they are incurred

HampM

Income

The Grouprsquos income is generated mainly by the sale of clothing and cosmetics to

3

consumers Sales revenue is reported less value-added tax returns and discounts as sales excluding VAT in the income statement Income is reported in conjunction with saledelivery to the customer Franchise sales have two components sales of goods to franchisees which are reported on delivery of the goods and franchise fees which are reported when the franchisee sells goods to the consumer The Grouprsquos income exhibits seasonal variations The first quarter of the financial year is normally the weakest and the last quarter the strong- est Interest income is reported as it is earned

VW

REVENUE AND EXPENSE RECOGNITION

Sales revenue interest and commission income from financial services and other operating income are recognized only when the relevant service has been rendered or the goods have been delivered that is when the risk has passed to the customer the amount of sales revenue can be reliably determined and settlement of the amount can be assumed Revenue is reported net of sales allowances (discounts rebates or customer bonuses) Sales revenue from financing and lease agreements is recognized using the effective interest method If non-interest-bearing or low-interest vehicle financing arrangements are agreed sales revenue is reduced by the interest benefits granted Revenue from operating leases is recognized using the straight-line method over the term of the lease Sales revenue from extended warranties or maintenance agreements is recognized when deliveries take place or services are rendered In the case of prepayments deferred income is recognized proportionately by reference to the costs expected to be incurred based on experience Revenue is recognized on a straight-line basis if there is insufficient experience If the expected costs exceed the accrued sales revenue a loss is recognized from these agreements

If a contract comprises several separately identifiable components (multiple-element arrangements) these components are recognized separately in accordance with the principles outlined above

Income from assets for which a Group company has a buy back obligation is recognized only when the assets have definitively left the Group If a fixed repurchase price was agreed when the contract was entered into the difference between the selling and repurchase price is recognized as income ratably over the term of the contract Prior to that time the assets are carried as inventories in the case of short contract terms and as leasing and rental assets in the case of long contract terms

Cost of sales includes the costs incurred to generate the sales revenue and the cost of goods purchased for resale This item also includes the costs of additions to warranty provisions Research and development costs not eligible for capitalization in the period and amortization of development costs are likewise

4

carried under cost of sales Reflecting the presentation of interest and commission income in sales revenue the interest and commission expenses attributable to the financial services business are presented in cost of sales

Construction contracts are recognized using the percentage of completion (PoC) method under which revenue and cost of sales are recognized by reference to the stage of completion at the end of the reporting period based on the contract revenue agreed with the customer and the expected contract costs As a rule the stage of completion is determined as the proportion that contract costs incurred by the end of the reporting period bear to the estimated total contract costs (cost-to- cost method) In certain cases in particular those involving innovative complex contracts the stage of completion is measured using contractually agreed milestones (milestone method) If the outcome of a construction contract cannot yet be estimated reliably contract revenue is recognized only in the amount of the contract costs incurred to date (zero profit method) In the balance sheet contract components whose revenue is recognized using the percentage of completion method are reported as trade receivables net of prepayments received Expected losses from construction contracts are recognized immediately in full as expenses by recognizing impairment losses on recognized contract assets and additionally by recognizing provisions for amounts in excess of the impairment losses

Dividend income is recognized on the date when the dividend is legally approved

BMW

Revenues from the sale of products are recognised when the risks and rewards of ownership of the goods are transferred to the dealer or customer provided that the amount of revenue can be measured reliably it is probable that the economic benefits associated with the transaction will flow to the entity and costs incurred or to be incurred in respect of the sale can be measured reliably Revenues are stated net of settlement discount bonuses and rebates Revenues also include lease rentals and interest income earned in conjunction with financial services Revenues from leasing instalments relate to operating leases and are recognised in the income statement on a straight line basis over the relevant term of the lease Interest income from finance leases and from customer and dealer financing are recognised using the effective interest method and reported as revenues within the line item ldquoInterest income on loan financingrdquo If the sale of products includes a determinable amount for subsequent services (multiple-component contracts) the related revenues are deferred and recognised as income over the relevant service period Amounts are normally recognised as income by reference to the pattern of related expenditure

Profits arising on the sale of vehicles for which a Group company retains a repurchase commitment (buy-back contracts) are not recognised until such profits have been realised The vehicles are included in inventories and stated at

5

cost

Siemens

Revenue recognition ndash Under the condition that persuasive evidence of an arrangement exists 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 regardless of when the payment is being made In cases where the inflow of economic benefits is not probable due to customer related credit risks the revenue recognized is subject to the amount of payments irrevocably received Revenue is measured at the fair value of the consideration received or receivable net of discounts and rebates and excluding taxes or duty The Company assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent The following specific recognition criteria must also be met before revenue is recognized

Sale of goods Revenue from the sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer usually on delivery of the goods

Sales from construction contracts A construction contract is a contract specifically negotiated for the construction of an asset or a combination of assets that are closely interrelated or inter- dependent in terms of their design technology and function or their ultimate purpose or use When the outcome of a construction contract can be estimated reliably revenues from construction-type projects are recognized under the percentage-of-completion method based on the percentage of costs to date compared to the total estimated contract costs An expected loss on the construction contract is recognized as an expense immediately When the outcome of a construction contract cannot be estimated reliably (1) revenue is recognized only to the extent contract costs incurred are probable of being recoverable and (2) contract costs are recognized as an expense in the period in which they are incurred

During project execution variation orders by the customer for a change in the scope of the work to be performed under the contract may be received leading to an increase or a decrease in contract revenue Examples of such variations are changes in the specifications or design of the asset and changes in the duration of the contract As the scope of work to be performed changes also in case of contract terminations such terminations are considered to be a subset of variations Therefore the requirements of IAS 11 relating to variations are applied to contract terminations irrespective of whether the contract is terminated by the customer Siemens or both In accordance with the requirements of IAS 11 relating to changes in estimates the estimates of the total contract revenue and the total contract costs are adjusted reflecting the reduced scope of work to be performed typically leading to a reversal of revenue recognized This methodology is also applied to contracts for which it is managementrsquos best estimate that a termination is the most likely scenario but which have not yet

6

been terminated

Rendering of services Revenues from service transactions are recognized as services are performed For long-term service contracts revenues are recognized on a straight-line basis over the term of the contract or if the performance pattern is other than straight-line as the services are provided ie under the percentage-of-completion method as described above

Sales from multiple element arrangements Sales of goods and services as well as software arrangements sometimes involve the provision of multiple elements In these cases the Company determines whether the contract or arrangement contains more than one unit of accounting If certain criteria are met foremost if the delivered element(s) has (have) value to the customer on a stand-alone basis the arrangement is separated and the appropriate revenue recognition convention is then applied to each separate unit of accounting Generally the

total arrangement consideration is allocated to the separate units of accounting based on their relative fair values How- ever if in rare cases fair value evidence is available for the undelivered but not for one or more of the delivered elements the amount allocated to the delivered element(s) equals the total arrangement consideration less the aggregate fair value of the undelivered element(s) (residual method) If the criteria for the separation of units of accounting are not met revenue is deferred until such criteria are met or until the period in which the last undelivered element is delivered

Interest income Interest is recognized using the effective interest method

Royalties Royalties are recognized on an accrual basis in accordance with the substance of the relevant agreement

Income from lease arrangements Operating lease income for equipment rentals is recognized on a straight-line basis over the lease term An arrangement that is not in the legal form of a lease is accounted for as a lease if it is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset Receivables from finance leases in which Siemens as lessor transfers substantially all the risks and rewards incidental to ownership to the customer are recognized at an amount equal to the net investment in the lease Finance income is subsequently recognized based on a pattern reflecting a constant periodic rate of return on the net investment using the effective interest method A selling profit component on manufacturing leases is recognized based on the policies for outright sales Profit from sale and leaseback transactions is recognized immediately if significant risks and rewards of ownership have passed to the buyer the leaseback results in an operating lease and the transaction is established at fair value

Dividends Dividends are recognized when the right to receive payment is established

7

Novartis

REVENUE RECOGNITIONREVENUERevenue is recognized on the sale of Novartis Group products and services and recorded as ldquoNet salesrdquo in the consolidated income statement when there is persuasive evidence that a sales arrangement exists title and risks and rewards for the products are transferred to the customer the price is determinable and collectability is reasonably assured When contracts contain customer acceptance provisions sales are recognized upon the satisfaction of acceptance criteria For surgical equipment this occurs when title and risk and rewards are transferred after installation and any required training has been completed For surgical equipment leased to customers revenue representing the net present value of the minimum lease payments is recognized at the commencement of the lease term if the lease term is for the major part of the economic life of the asset or if the payments represent substantially most of its fair value even if the legal ownership is not transferred If products are stockpiled at the request of the customer revenue is only recognized once the products have been inspected and accepted by the customer and there is no right of return or replenishment on product expiry and cost of storage will be paid by the customer on normal commercial terms

Provisions for rebates and discounts granted to government agencies wholesalers retail pharmacies managed care and other customers are recorded as a reduction of revenue at the time the related revenues are recorded or when the incentives are offered They are calculated on the basis of historical experience and the specific terms in the individual agreements Provisions for refunds granted to health- care providers under innovative pay-for-performance agreements are recorded as a reduction of revenue at the time the related sales are recorded They are calculated on the basis of historical experience and clinical data available for the product as well as the specific terms in the individual agreements In cases where historical experience and clinical data are not sufficient for a reliable estimation of the outcome revenue recognition is deferred until such history is available

Cash discounts are offered to customers to encourage prompt payment and are recorded as revenue deductions Wholesaler shelf-inventory adjustments are granted to customers based on the existing inventory of a product at the time of decreases in the invoice or contract price of a product or at the point of sale if a price decline is reasonably estimable When there is historical experience of Novartis agreeing to customer returns or Novartis can otherwise reasonably estimate expected future returns a provision is recorded for estimated sales returns In doing so the estimated rate of return is applied determined based on historical experience of customer returns or considering any other relevant factors This is applied to the amounts invoiced also considering the amount of returned products to be destroyed versus products that can be placed back in inventory for resale Where shipments are made on a re-sale or return basis with- out sufficient historical experience for estimating sales returns revenue is only recorded when there is evidence of consumption or when the right of return

8

has expired

Provisions for revenue deductions are adjusted to actual amounts as rebates discounts and returns are processed The provision represents estimates of the related obligations requiring the use of judgment when estimating the effect of these sales deductions

OTHER REVENUE

Royalty income is reported under ldquoOther revenuerdquo in the consolidated income statement and recognized on an accrual basis in accordance with the substance of the relevant agreements

1113132

Vodafone

Revenue

Revenue is recognised to the extent the Group has delivered goods or rendered services under an agreement the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the Group Revenue is measured at the fair valueof the consideration received exclusive of sales taxes and discounts

The Group principally obtains revenue from providing the following telecommunication services access charges airtime usage messaging interconnect fees data services and information provision connection fees and equipment sales products and services may be sold separately or in bundled packages

Revenue for access charges airtime usage and messaging by contract customers is recognised as services are performed with unbilled revenue resulting from services already provided accrued at the end of each period and unearned revenue from services to be provided in future periods deferred Revenue from the sale of prepaid credit is deferred until such time as the customer uses the airtime1113093 or the credit expires

Revenue from interconnect fees is recognised at the time the services are performed

Revenue from data services and information provision is recognised when the Group has performed the related service and depending on the nature of the service is recognised either at the gross amount billed to the customer or the amount receivable by the Group as commission for facilitating the service

Customer connection revenue is recognised together with the related equipment revenue to the extent that the aggregate equipment and connection revenue

9

does not exceed the fair value of the equipment delivered to the customer Any customer connection revenue not recognised together with related equipment revenue is deferred and recognised over the period in which services are expected to be provided to the customer

Revenue for device sales is recognised when the device is delivered to the end customer and the sale is considered complete For device sales made to intermediaries revenue is recognised if the significant risks associated with the device are transferred to the intermediary and the intermediary has no general right of return If the significant risks are not transferred revenue recognition is deferred until sale of the device to an end customer by the intermediary or the expiry of the right of return

In revenue arrangements including more than one deliverable the arrangements are divided into separate units of accounting deliverables are considered separate units of accounting if the following two conditions are met (1) the deliverable has value to the customer on a stand-alone basis and (2) there is evidence of the fair value of the item The arrangement consideration is allocated to each separate unit of accounting based on its relative fair value

Unilever

REVENUE RECOGNITION

Turnover comprises sales of goods after the deduction of discounts sales taxes and estimated returns It does not include sales between group companies Discounts given by Unilever include rebates price reductions and incentives given to customers promotional couponing and trade communication costs

Turnover is recognised when the risks and rewards of the underlying products have been substantially transferred to the customer Depending on individual customer terms this can be at the time of dispatch delivery or upon formal customer acceptance

BG Group

Revenue recognition

Revenue associated with EampP sales (of natural gas crude oil and petroleum products) is recorded when title passes to the customer Revenue from the production of natural gas and oil in which BG Group has an interest with other producers is recognised based on the Grouprsquos working interest and the terms of the relevant production sharing contracts (entitlement method)

Sales of LNG and associated products are recognised when title passes to the customer LNG shipping revenue is recognised over the period of the relevant contract

10

All other revenue is recognised when title passes to the customer

HSBC

Interest income and expense

Interest income and expense for all financial instruments except for those classified as held for trading or designated at fair value (except for debt securities issued by HSBC and derivatives managed in conjunction with those debt securities) are recognised in lsquoInterest incomersquo and lsquoInterest expensersquo in the income statement using the effective interest method The effective interest method is a way of calculating the amortised cost of a financial asset or a financial liability (or groups of financial assets or financial liabilities) and of allocating the interest income or interest expense over the relevant period

The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments through the expected life of the financial instrument or where appropriate a shorter period to the net carrying amount of the financial asset or financial liability When calculating the effective interest rate HSBC estimates cash flows considering all contractual terms of the financial instrument but excluding future credit losses The calculation includes all amounts paid or received by HSBC that are an integral part of the effective interest rate of a financial instrument including transaction costs and all other premiums or discounts

Interest on impaired financial assets is recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss

(b) Non-interest incomeFee income is earned from a diverse range of services provided by HSBC to its customers Fee income is accounted for as follows

income earned on the execution of a significant act is recognised as revenue when the act is completed (for example fees arising from negotiating or participating in the negotiation of a transaction for a third party such as an arrangement for the acquisition of shares or other securities)

income earned from the provision of services is recognised as revenue as the services are provided (for example asset management portfolio and other management advisory and service fees) and

income which forms an integral part of the effective interest rate of a financial instrument is recognised as an adjustment to the effective interest rate (for example certain loan commitment fees) and recorded in lsquoInterest incomersquo Net trading income comprises all gains and losses from

11

changes in the fair value of financial assets and financial liabilities held for trading together with the related interest income expense and dividends Net income(expense) from financial instruments designated at fair value includes

minus all gains and losses from changes in the fair value of financial assets and financial liabilities designated at fair value through profit or loss including liabilities under investment contracts

minus all gains and losses from changes in the fair value of derivatives that are managed in conjunction with financial assets and liabilities designated at fair value through profit or loss and

minus interest income interest expense and dividend income in respect ofndash financial assets and financial liabilities designated at fair value through profit or loss and ndash derivatives managed in conjunction with the above except for interest arising from debt securities issued by HSBC and derivatives managed in conjunction with those debt securities which is recognised in lsquoInterest expensersquo (Note 2a)

Dividend income is recognised when the right to receive payment is established This is the ex-dividend date for listed equity securities and usually the date when shareholders have approved the dividend for unlisted equity securities

LVMH

Revenue recognition

Definition of revenue Revenue mainly comprises retail sale within the Grouprsquos store network and sales through agents and distributors Sales made in stores owned by third parties are treated as retail transactions if the risks and rewards of ownership of the inventories are retained by the Group

Direct sales to customers are made through retail stores for Fashion and Leather Goods and Selective Retailing as well as certain Watches and Jewelry and Perfumes and Cosmetics brands These sales are recognized at the time of purchase by retail customers

Wholesale sales concern Wines and Spirits as well as certain Perfumes and Cosmetics and Watches and Jewelry brands The Group recognizes revenue when title transfers to third party customers generally upon shipment

12

Revenue includes shipment and transportation costs re-billed to customers only when these costs are included in productsrsquo selling prices as a lump sum Revenue is presented net of all forms of discount In particular payments made in order to have products referenced or in accordance with agreements to participate in advertising campaigns with the distributors are deducted from related revenue

Provisions for product returns Perfumes and Cosmetics and to a lesser extent Fashion and Leather Goods and Watches and Jewelry companies may accept the return of unsold or outdated products from their customers and distributors

Where this practice is applied revenue and the corresponding trade receivables are reduced by the estimated amount of such returns and a corresponding entry is made to inventories The estimated rate of returns is based on statistics of historical returns

Total

Sales and revenues from sales Sales figures include excise taxes collected by the Group within the course of its oil distribution operations Excise taxes are deducted from sales in order to obtain the ldquoRevenues from salesrdquo indicator

(i) Sale of goods

Revenues from sales are recognized when the significant risks and rewards of ownership have been passed to the buyer and when the amount is recoverable and can be reasonably measured

Revenues from sales of crude oil natural gas and coal are recorded upon transfer of title according to the terms of the sales contracts

Revenues from the production of crude oil and natural gas properties in which the Group has an interest with other producers are recognized based on actual volumes sold during the period Any difference between volumes sold and entitlement volumes based on the Group net working interest is recognized asldquoCrude oil and natural gas inventoriesrdquo or ldquoOther current assetsrdquoor ldquoOther creditors and accrued liabilitiesrdquo as appropriate

Quantities delivered that represent production royalties and taxes when paid in cash are included in oil and gas sales except for the United States and Canada

Certain transactions within the trading activities (contracts involving

13

quantities that are purchased from third parties then resold to third parties) are shown at their net value in sales

Exchanges of crude oil and petroleum products within normal Trading activities do not generate any income and therefore these flows are shown at their net value in both the statement of income and the balance sheet

ii) Sale of services

Revenues from services are recognized when the services have been rendered

Revenues from gas transport are recognized when services are rendered These revenues are based on the quantities transported and measured according to procedures defined in each service contract

Shipping revenues and expenses from time-charter activities are recognized on a pro rata basis over a period that commences upon the unloading of the previous voyage and terminates upon the unloading of the current voyage Shipping revenue recognition starts only when a charter has been agreed to by both the Group and the customer

(iii) Solar Farm Development Projects

SunPower develops and sells solar farm projects This activity generally contains a property component (land ownership or an interest in land rights) The revenue associated with the development of these projects is recognized when the entities-projects and land rights are irrevocably sold

Revenues under contracts for construction of solar systems are recognized based on the progress of construction works measured according to the percentage of costs incurred relative to total forecast costs

BNP Paribas

INCOME AND EXPENSES ARISING FROM FINANCIAL ASSETS AND FINANCIAL LIABILITIES

Income and expenses arising from financial instruments measured at amortised cost and from fixed- income securities classified in ldquoAvailable-for-sale financial assetsrdquo are recognised in the profit and loss account using the effective interest method The effective interest rate is the rate that exactly discounts estimated future cash flows through the expected life of the financial instrument or when appropriate a shorter period to the net carrying amount of the asset or liability in the balance sheet The effective interest rate calculation takes into account all fees received or paid that are an integral part of the effective interest rate of the contract transaction costs and premiums and discounts The method used by the Group to recognise service-related commission income and expenses depends on the nature of the service

14

Commission treated as an additional component of interest is included in the effective interest rate and is recognised in the profit and loss account in ldquoNet interest incomerdquo Commission payable or receivable on execution of a significant transaction is recognised in the profit and loss account in full on execution of the transaction under ldquoCommission income and expenserdquo Commission payable or receivable for recurring services is recognised over the term of the service also under ldquoCommission income and expenserdquo Commission received in respect of financial guarantee commitments is regarded as representing the fair value of the commitment The resulting liability is subsequently amortised over the term of the commitment under commission income in Revenues

BP

Revenue

Revenue arising from the sale of goods is recognized when the significant risks and rewards of ownership have passed to the buyer which is typically at the point that title passes and the revenue can be reliably measured Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods provided in the normal course of business net of discounts customs duties and sales taxes Physical exchanges are reported net as are sales and purchases made with a common counterparty as part of an arrangement similar to a physical exchange Similarly where the group acts as agent on behalf of a third party to procure or market energy commodities any associated fee income is recognized but no purchase or sale is recorded Additionally where forward sale and purchase contracts for oil natural gas or power have been determined to be for trading purposes the associated sales and purchases are reported net within sales and other operating revenues whether or not physical delivery has occurred

Generally revenues from the production of oil and natural gas properties in which the group has an interest with joint operation partners are recognized on the basis of the grouprsquos working interest in those properties (the entitlement method) Differences between the production sold and the grouprsquos share of production are not significant

Interest income is recognized as the interest accrues (using the effective interest rate that is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset)

Dividend income from investments is recognized when the shareholdersrsquo right to receive the payment is established

Nestleacute

15

Revenue Sales represent amounts received and receivable from third parties for goods supplied to the customers and for services rendered Revenue from the sales of goods is recognised in the income statement at the moment when the significant risks and rewards of ownership of the goods have been transferred to the buyer which is mainly upon shipment

It is measured at the list price applicable to a given distribution channel after deduction of returns sales taxes pricing allowances other trade discounts and couponing and price promotions to consumers Payments made to the customers for commercial services received are expensed Other revenue is primarily license fees from third parties which have been earned during the period

Telefonica

l) Revenue and expenses

The Telefoacutenica Group revenues are derived principally from providing the following telecommunications services traffic connection fees regular (normally monthly) network usage fees interconnection network and equipment leasing handset sales and other services such as pay TV and value-added services (text or data messages among others) or maintenance Products and services may be sold separately or bundled in promotional packages

Revenues from calls carried on Telefoacutenicarsquos networks (traffic) entail an initial call establishment fee plus a variable call rate based on call length distance and type of service Both wireline and wireless traffic is recognized as revenue as service is provided For prepaid calls the amount of unused traffic generates a deferred revenue presented in ldquoTrade and other payablesrdquo on the statement of financial position Prepaid cards generally expire within 12 months and any deferred revenue from prepaid traffic is recognized directly in the income statement when the card expires as the Group has no obligation to provide service after expiry date

Revenues from traffic sales and services at a fixed rate over a specified period of time (flat rate) are recognized on a straight-line basis over the term covered by the rate paid by the customer

Connection fees arising when customers connect to the Grouprsquos network are deferred and recognized in the income statement throughout the average estimated customer relationship period which varies by type of service All related costs except those related to network expansion as well as administrative expenses and overhead are recognized in the income statement as incurred

16

Installation fees are taken to the income statement on a straight-line basis over the related period Equipment leases and other services are taken to profit or loss as they are consumed

Interconnection revenues from wireline-wireless and wireless-wireline calls and other customer services are recognized in the period in which the calls are made

Revenues from handset and equipment sales are recognized once the sale is considered complete ie generally when delivered to the end customer

Bundled packages which include multiple elements are sold in the wireline wireless and internet businesses They are assessed to determine whether it is necessary to separate the separately identifiable elements and apply the corresponding revenue recognition policy to each element Total package revenue is allocated among the identified elements based on their respective fair values (ie the fair value of each element relative to the total fair value of the package)

As connection or initial activation fees or upfront non-refundable fees are not separately identifiable elements in these types of packages any revenues received from the customer for these items are allocated to the remaining elements Additionally when allocating the package revenue to the elements amounts contingent upon delivery of undelivered elements are not allocated to delivered elements

All expenses related to bundled promotional packages are recognized in the income statement as incurred

Inditex

17

Rio Tinto

c) Sales revenue

Sales revenue comprises sales to third parties at invoiced amounts Most sales are priced ex works free on board (fob) or cost insurance and freight (cif) Amounts billed to customers in respect of shipping and handling are classified as sales revenue where the Group is responsible for carriage insurance and freight All shipping and handling costs incurred by the Group are recognised as operating costs If the Group is acting solely as an agent amounts billed to customers are offset against the relevant costs Revenue from services is recognised as services are rendered and accepted by the customer

Sales revenue excludes any applicable sales taxes Mining royalties are presented as an operating cost or where they are in substance a profit-based tax within taxation

Revenues from the sale of significant by-products such as gold are included in sales revenue Sundry revenue incidental to the main revenue-generating activities of the operations and which is a consequence of producing and selling the main products is treated as a credit to operating costs

Third-party commodity swap arrangements for delivery and receipt of smelter grade alumina are offset within operating costs Sales revenue is only recognised

18

on individual sales when all of the following criteria are met

the significant risks and rewards of ownership of the product have been transferred to the buyerneither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold has been retained the amount of revenue can be measured reliablyit is probable that the economic benefits associated with the sale will flow to the Group andthe costs incurred or to be incurred in respect of the sale can be measured reliably

These conditions are generally satisfied when title passes to the customer In most instances sales revenue is recognised when the product is delivered to the destination specified by the customer which is typically the vessel on which it will be shipped the destination port or the customerrsquos premises

The majority of the Grouprsquos products are sold to customers under contracts which vary in tenure and pricing mechanisms with some volumes sold in the spot market

Pricing for iron ore is on a range of terms the majority being either monthly or quarterly average pricing mechanisms with a smaller proportion of iron ore volumes being sold on the spot market Substantially all iron ore sales are reflected at final prices in the results for the period based on the best available information at the period end

Sales revenue is commonly subject to adjustment based on an inspection of the product by the customer In such cases sales revenue is initially recognised on a provisional basis using the Grouprsquos best estimate of contained metal and adjusted subsequently

Certain products are ldquoprovisionally pricedrdquo ie the selling price is subject to final adjustment at the end of a period normally ranging from 30 to 180 days after delivery to the customer The final price is based on the market price at the relevant quotation point stipulated in the contract

As is customary in the industry revenue on provisionally-priced sales is recognised based on estimates of the fair value of the consideration receivable based on relevant forward market prices At each reporting date provisionally priced metal is marked to market based on the forward selling price for the quotational period stipulated in the contract For this purpose the selling price can be measured reliably for those products such as copper for which there exists an active and freely-traded commodity market such as the London Metals Exchange and the value of product sold by the Group is directly linked to the form in which it is traded on that market

The marking to market of provisionally-priced sales contracts is recorded as an adjustment to sales revenue Information on provisionally-priced sales contracts is included in note 30

19

20

ENI

Revenues and costs

Revenues associated with sales of products and services are recognized when significant risks and rewards of ownership have passed to the customer or when the transaction can be considered settled and the associated revenue can be reliably measured In particular revenues are recognized for the sale of

bull crude oil generally upon shipment bull natural gas upon delivery to the customerbull petroleum products sold to retail distribution networks generally upon delivery to the service stations whereas all other sales of petroleum products are generally recognized upon shipment andbull chemical products and other products generally upon shipment

Revenues are recognized upon shipment when at that date significant risks are transferred to the buyer Revenues from crude oil and natural gas production from properties in which Eni has an interest together with other producers are recognized on the basis of Enirsquos net working interest in those properties (entitlement method) Differences between Enirsquos net working interest volume and actual production volumes are recognized at current prices at year end Revenues related to partially rendered services are recognized by reference to the stage of completion provided that (i) the amount of revenues can be measured reliably (ii) it is probable that the economic benefits associated with the transaction will flow to the entity (iii) the stage of completion of the transaction at the end of the reporting period can be measured reliably and (iv) the related costs can be measured reliably When the outcome of the transaction involving the rendering of services cannot be estimated reliably revenue is recognized only to the extent of the expenses recognized that are recoverable Revenues accrued during the year related to construction contracts are recognized on the basis of contractual revenues with reference to the stage of completion of a contract measured on the cost-to-cost basis For service concession arrangements (see item Intangible assets above) in which customers fees do not provide a reliable distinction between the compensation for constructionupdate of the infrastructure and the compensation for operating it and in the absence of external benchmarks revenues recognized during the constructionupdate phase are limited to the amount of the costs incurred Additional revenues derived from a change in the scope of work are included in the total amount of revenues when it is probable that the customer will approve the variation and the related amount Claims deriving from additional costs incurred for reasons attributable to the customer are included in the total amount of revenues when it is probable that the counterparty will accept them Tangible assets different from an infrastructure used in service concession arrangements transferred from customers (or constructed using cash transferred from customers) and used to connect them to a network to supply goods and services are recognized at their fair value as an offset to revenues When more than one

2


HampM

Income


3


VW






4




BMW



5

cost

Siemens





6

been terminated








7

Novartis




8

has expired


OTHER REVENUE


1113132

Vodafone

Revenue







9




Unilever

REVENUE RECOGNITION



BG Group

Revenue recognition



10


HSBC









11






LVMH

Revenue recognition




12




Total


(i) Sale of goods






13










BNP Paribas



14


BP

Revenue





Nestleacute

15



Telefonica






16







Inditex

17

Rio Tinto

c) Sales revenue





18










19

20


HampM

Income


3


VW






4




BMW



5

cost

Siemens





6

been terminated








7

Novartis




8

has expired


OTHER REVENUE


1113132

Vodafone

Revenue







9




Unilever

REVENUE RECOGNITION



BG Group

Revenue recognition



10


HSBC









11






LVMH

Revenue recognition




12




Total


(i) Sale of goods






13










BNP Paribas



14


BP

Revenue





Nestleacute

15



Telefonica






16







Inditex

17

Rio Tinto

c) Sales revenue





18










19

20


VW






4




BMW



5

cost

Siemens





6

been terminated








7

Novartis




8

has expired


OTHER REVENUE


1113132

Vodafone

Revenue







9




Unilever

REVENUE RECOGNITION



BG Group

Revenue recognition



10


HSBC









11






LVMH

Revenue recognition




12




Total


(i) Sale of goods






13










BNP Paribas



14


BP

Revenue





Nestleacute

15



Telefonica






16







Inditex

17

Rio Tinto

c) Sales revenue





18










19

20




BMW



5

cost

Siemens





6

been terminated








7

Novartis




8

has expired


OTHER REVENUE


1113132

Vodafone

Revenue







9




Unilever

REVENUE RECOGNITION



BG Group

Revenue recognition



10


HSBC









11






LVMH

Revenue recognition




12




Total


(i) Sale of goods






13










BNP Paribas



14


BP

Revenue





Nestleacute

15



Telefonica






16







Inditex

17

Rio Tinto

c) Sales revenue





18










19

20

cost

Siemens





6

been terminated








7

Novartis




8

has expired


OTHER REVENUE


1113132

Vodafone

Revenue







9




Unilever

REVENUE RECOGNITION



BG Group

Revenue recognition



10


HSBC









11






LVMH

Revenue recognition




12




Total


(i) Sale of goods






13










BNP Paribas



14


BP

Revenue





Nestleacute

15



Telefonica






16







Inditex

17

Rio Tinto

c) Sales revenue





18










19

20

been terminated








7

Novartis




8

has expired


OTHER REVENUE


1113132

Vodafone

Revenue







9




Unilever

REVENUE RECOGNITION



BG Group

Revenue recognition



10


HSBC









11






LVMH

Revenue recognition




12




Total


(i) Sale of goods






13










BNP Paribas



14


BP

Revenue





Nestleacute

15



Telefonica






16







Inditex

17

Rio Tinto

c) Sales revenue





18










19

20

Novartis




8

has expired


OTHER REVENUE


1113132

Vodafone

Revenue







9




Unilever

REVENUE RECOGNITION



BG Group

Revenue recognition



10


HSBC









11






LVMH

Revenue recognition




12




Total


(i) Sale of goods






13










BNP Paribas



14


BP

Revenue





Nestleacute

15



Telefonica






16







Inditex

17

Rio Tinto

c) Sales revenue





18










19

20

has expired


OTHER REVENUE


1113132

Vodafone

Revenue







9




Unilever

REVENUE RECOGNITION



BG Group

Revenue recognition



10


HSBC









11






LVMH

Revenue recognition




12




Total


(i) Sale of goods






13










BNP Paribas



14


BP

Revenue





Nestleacute

15



Telefonica






16







Inditex

17

Rio Tinto

c) Sales revenue





18










19

20




Unilever

REVENUE RECOGNITION



BG Group

Revenue recognition



10


HSBC









11






LVMH

Revenue recognition




12




Total


(i) Sale of goods






13










BNP Paribas



14


BP

Revenue





Nestleacute

15



Telefonica






16







Inditex

17

Rio Tinto

c) Sales revenue





18










19

20


HSBC









11






LVMH

Revenue recognition




12




Total


(i) Sale of goods






13










BNP Paribas



14


BP

Revenue





Nestleacute

15



Telefonica






16







Inditex

17

Rio Tinto

c) Sales revenue





18










19

20






LVMH

Revenue recognition




12




Total


(i) Sale of goods






13










BNP Paribas



14


BP

Revenue





Nestleacute

15



Telefonica






16







Inditex

17

Rio Tinto

c) Sales revenue





18










19

20




Total


(i) Sale of goods






13










BNP Paribas



14


BP

Revenue





Nestleacute

15



Telefonica






16







Inditex

17

Rio Tinto

c) Sales revenue





18










19

20










BNP Paribas



14


BP

Revenue





Nestleacute

15



Telefonica






16







Inditex

17

Rio Tinto

c) Sales revenue





18










19

20


BP

Revenue





Nestleacute

15



Telefonica






16







Inditex

17

Rio Tinto

c) Sales revenue





18










19

20



Telefonica






16







Inditex

17

Rio Tinto

c) Sales revenue





18










19

20







Inditex

17

Rio Tinto

c) Sales revenue





18










19

20

Rio Tinto

c) Sales revenue





18










19

20










19

20

my.liuc.itmy.liuc.it/MatSup/2014/A86045/SM 3 Revenues- Accounting... · Web viewENI Revenues and...

Documents

Transcript of my.liuc.itmy.liuc.it/MatSup/2014/A86045/SM 3 Revenues- Accounting... · Web viewENI Revenues and...