Notes to the Financial Statements
(Cont’d)
For the year ended 30 April 2015
(In Singapore Dollars)
ANNUAL REPORT 2015
56
BUILDING ON OUR EXTENSIVE NETWORK
2.
Summary of significant accounting policies (cont’d)
2.20
Hire-purchases
Hire-purchases, which effectively transfer to the Group substantially all the risks and benefits incidental to
ownership of the hire-purchase item, are capitalised at the present value of the minimum hire-purchase
payments at the inception of the hire-purchase term. Any initial direct costs are also added to the amount
capitalised. Hire-purchase payments are apportioned between the finance charges and reduction of the
hire-purchase liability so as to achieve a constant rate of interest on the remaining balance of the liability.
Finance charges are charged directly to profit or loss. Depreciation on the relevant assets is charged to
profit or loss on the basis outlined in Note 2.7.
2.21
Operating leases
As lessee
Leases where substantially all the risks and benefits of ownership of the lease effectively remain with the
lessor are classified as operating leases.
Operating lease payments are recognised as an expense in profit or loss on a straight line basis over the
lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of
rental expense over the lease term on a straight line basis.
2.22
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the
Group and the revenue can be reliably measured regardless of when the payment is made. Revenue
is measured at the fair value of consideration received or receivable, taking into account contractually
defined terms of payment and excluding goods and services tax, and sales return.
(a)
Sale of goods
Revenue from sale of goods is recognised upon the transfer of significant risks and rewards of
ownership of the goods to the customer, usually on delivery of goods. Revenue is not recognised to
the extent where there are significant uncertainties regarding the recovery of the consideration due,
associated costs or the possible return of goods.
(b)
Rendering of services
Revenue from the rendering of services is recognised when the services have been performed.
(c)
Volume rebates
Volume rebates from suppliers for purchases made during the financial year is deducted from the
cost of inventory if the goods remain unsold at the end of the reporting period or credited against
cost of goods sold in profit or loss if the goods have been sold at the end of the reporting period.
