RevenuesKey Definition Revenue: the gross inflow of economic

benefits (cash, receivables, other assets) arising from the ordinary operating activities of an entity (such as sales of goods, sales of services, interest, royalties, and dividends). [IAS 18.7]

Cont.Measurement of Revenue Revenue should be measured at the fair value

of the consideration received or receivable. [IAS 18.9] An exchange for goods or services of a similar nature and value is not regarded as a transaction that generates revenue. However, exchanges for dissimilar items are regarded as generating revenue. [IAS 18.12]

Cont.Recognition of Revenue Recognition, as defined in the IASB

Framework, means incorporating an item that meets the definition of revenue (above) in the income statement when it meets the following criteria:

it is probable that any future economic benefit associated with the item of revenue will flow to the entity, and

the amount of revenue can be measured with reliability

ExpensesThe matching principle requires that all

expenses incurred in generating that same revenue also be recognized. The net result is a measure—net income—that matches current period accomplishments and sacrifices.

Cont.An expense can be recognized:i. Based on an exact cause-and-effect

relationship between a revenue and expense event.

ii.By associating an expense with the revenues recognized in a specific time period.

iii.By a systematic and rational allocation to specific time periods.

iv.In the period incurred, without regard to related revenues.

Contents of the SCIMinimum items that are to be shown on the

face of SCI:a)Revenueb)Finance costsc)Share of profits of associates and joint ventured)Tax expensee)A single item comprising post-tax profit or

loss of discontinued operation plus the post-tax gain and loss on measurement to fair value less cost of sell or on disposal of assets or disposal groups(s) of discontinued operation

Cont.f) Profit or lossg) Each component of other comprehensive

income classified by nature h) Share of profits of other comprehensive

income of associates and joint venturei) Total comprehensive incomej) Profit for the period attributable to:

i. Non-controlling interest, and ii. Owners of the parent

Cont.Items that can be either disclosed on the face of

SCI or in the notes are:a)Income and expenses that are material:

i. Write-downs of inventories to net realisable value

ii. Restructuring costs and reversal of provisions for restructuring

iii. Disposal of investmentsiv. Discontinued operationsv. Litigation settlementsvi. Other reversals of provisions

Cont.Classification of expenseExpense can be presented based on analysis

of nature and function

Notes to the accountsNotes accompanying the SCI (disclose on the

notes):a)Turnover or other relevant revenue

Sales or other operating revenue is to be disclosed together with the method by which it is arrived

b)Net results of operating incomec)Gross investment income

Income from shares and debentures must be disclosed separately, distinguished between income from those shares and debentures quoted on the stock exchange within Malaysia or outside Malaysia; and income from other sources

Cont.d) Interest incomee) Rental incomef) Depreciation, amortisation and impairment of

assetsg) Expenses such as:

i. Finance cost including interest on debentures, loans. Overdrafts and other borrowing

ii. Rent for land and buildingiii. Hire of plant and machineryiv. Research and developmentv. Auditors’ remunerationvi. Operating expenses- include items such as cost of

sales, distribution costs, administrative expenses, changes in inventories, staff costs

Cont.h) Directors’ remunerationi) Profit or loss, if material, on disposal of non-

current tangible or intangible assetsj) Profit or loss from continued and discontinued

operationsk) Taxation for continued and discontinued operationsl) Exceptional and unusual credits or chargesm) Earnings per share

EPS disclose on the face of SCI Basis of calculating EPS disclose on the face or as a

note.

Disclosure in SCI9th schedule of the CA1965 and various FRS

specify the minimum information to be disclosed in the SCI:

a) Sales or other operating revenueb)Net profit from tradingc)Gross income from investments in subsidiariesd)Gross income from shares and debentures

listed in Malaysiae)Gross income from shares and debentures

listed outside Malaysia

Cont.f) Gross income from other sourcesg) Interest income other than from debenturesh) Rental income (plant and buildings)i) Depreciation, amortisation and diminution in

value of each category of non-current assets, goodwill and intangibles and investments

j) Amount charged as interest, rent, hire of plant and research and development

k) Any profit or loss, if material, arising on disposal of non-current tangible and intangible assets

Cont.l) Any amount set aside or proposed to set aside

from reservesm) Provisions other than provisions for depreciation,

and movements in the provisionn) Tax payableo) Any tax savings on tax lossesp) Dividends paid and proposedq) Directors’ fees and emoluments separately

disclosedr) Money value of benefits paid to directorss) Any amount paid or received on account of

services provided by present or past directors

Cont.t) Auditors’ remunerationu) Exceptional or unusual revenue or

expenses, and the tax effect on themv) Prior year adjustments and tax effect on

themw) Changes in estimatex) Significant transactions with related

corporations