WindarPhotonics AnnualReport 2018 All - Flipbook - Page 51
4. Accounting policies (continued)
Revenue arises from three areas of the business and is recognised as follows:
• Product sale. Revenue is recognised when the obligation of delivery of the product to the customer is
complete at full contract value,
• Installation. Revenue is recognised when the obligation to of acceptance of installation is complete at full
contract value.
• Sale under performance obligation. Where there is a requirement to prove performance of product within
the contract in respect of the increase in output from the turbines, revenue is recognised at a point in time
when each of the distinct performance obligations are satisfied which is 60% on delivery of product, 30%
on installation and 10% when the performance obligation in terms of generated output is met.
Where payment for installation and other performance services is received before the installation and other
services has been completed, revenue is deferred and included within creditors and released on completion
of the installation and service obligations.
No adjustment is made to the revenue recognised in respect of any financing component of the contract.
Where products are sold with warranties revenue is recognised in the period where the products are shipped
and an appropriate provision for claims under warranty is based on past experience is accounted for in
accordance to IAS 37. This is shown as an expense in the Consolidated Statement of Profit and Loss and
Other Comprehensive Income.
Other Operating Income includes sales of other services and rental income originating from outside the core
business of the Group and is recognised exclusive of VAT and other taxes.
Foreign currency
Transactions entered into by Group entities in a currency other than the currency of the primary economic
environment in which they operate (their “functional currency”) are recorded at the rates ruling when the
transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the
reporting date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities
are recognised immediately in profit or loss.
On consolidation, the results of overseas operations are translated into Euros at rates approximating to those
ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the
rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening
rate and the results of overseas operations at actual rate are recognised in other comprehensive income and
accumulated in the foreign exchange reserve.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision maker has been identified as the board of directors.
Financial assets and liabilities
Financial assets
The Group classifies all its financial assets into the amortised cost category. The Group’s accounting policy
for each category is as follows:
• Trade and loan receivables: Trade receivables are initially recognised by the Group and carried at original
invoice amount less an allowance for any uncollectible or impaired amounts. An impairment provision is
calculated by considering the trade receivables and expected credit losses. The Group applies the IFRS 9
simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for
trade receivables. The expected loss rates are based on the Group’s historical credit losses experienced over
the three year period prior to the period end. The historical loss rates are then adjusted for current and
forward-looking information on factors affecting the Group’s customers. An estimate for doubtful debts is also
made when collection of the full amount is no longer probable. Debts are written off when they are identified
as being uncollectible. Trade receivables and other receivables are recognised at fair value. Loan receivables
are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
They arise principally through the intercompany loans; Impairment of loan receivables is calculated utilising
the lifetime expected credit losses of these loans and the changes in the credit risk of the counterparty.
• Cash and cash equivalents in the statement of financial position comprise cash at bank, cash in hand
and including restricted cash.
Windar Photonics - Annual Report and Accounts 2018
49