Page 59 - CPC 2018 Annual Report

FINANCIAL STATEMENTS 57
(o) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and similar allowances. Allowance for sales returns and liability for returns are recognized at the time of sale based on the seller’s reliable estimate of future returns and based on past experience and other relevant factors.
1. Sale of goods
Revenue from the sale of goods is recognized when all the following conditions are satisfied:
(i) The Company has transferred to the buyer the significant risks and rewards of ownership of the goods;
(ii) The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
(iii) The amount of revenue can be measured reliably;
(iv) It is probable that the economic benefits associated with the transaction will flow to the Company; and (v) The costs incurred or to be incurred in respect of the transaction can be measured reliably.
Under the Company’s customer loyalty program, sales of goods that result in reward credits for customers are accounted for as multiple-element revenue transactions, and the fair value of the consideration received or receivable is allocated both to the goods supplied and the reward credits granted. The portion of the consideration allocated to the reward credits should be measured at fair value and recognized as income when the customer receives the award.
2. Dividend and interest income
Dividend income from investments is recognized when the shareholder’s right to receive payment has been established and if it is probable that the economic benefits will flow to the Company and the income can be measured reliably.
Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.
(p) Employee benefits
1. Short-term employee benefits
Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
2. Retirement benefits
Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.
Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost) and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in unappropriated earnings and will not be reclassified to profit or loss.
Net defined benefit liability represents the actual deficit in the Company’s defined benefit plan.