Sales are recognized net of related taxes as well as revenue-lowering items. They are deemed realized once the goods have been delivered or the services have been rendered, the material opportunities and risks of ownership have been transferred to the purchaser, the amount of revenue can be reliably determined, and payment is sufficiently probable. When sales are recognized, estimated amounts are taken into account for expected revenue-lowering items, for example rebates, discounts and returns.
In addition to revenue from the sale of goods, sales also include revenue from services, but the volume involved is insignificant.
Depending on the substance of the relevant agreements, royalty, license and commission income is recognized either immediately or on an accrued basis if further contractual obligations exist.
Dividend income is recognized when the shareholders’ right to receive the dividend is established. This is normally the date of the dividend resolution. Interest income is recognized on a pro rata basis using the effective interest rate method.
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