Page 88 - ar2013.pdf

NOTES TO THE FINANCIAL STATEMENTS
For the Ànancial year ended 31 December 2013
86
COSCO Corporation (Singapore) Limited
F i nanc i a l Statement s
2. Significant accounting policies (continued)
2.2 Revenue recognition (continued)
The Group recognises revenue when the amount of revenue and related cost can be reliably measured, when it is
probable that the collectibility of the related receivables is reasonably assured and when the specific criteria for each
of the Group’s activities are met as follows:
(a) Rendering of services
(i) Ship repair, ship building and marine related activities
Revenue from ship repair, ship building, marine engineering, container repairs and services, fabrication
work services and production of marine outfitting components is recognised on the percentage-of-
completion method based on progress of the contract work, where the outcome of the contract
can be estimated reliably. If the contract covers a number of projects and the cost and revenue of
such individual projects can be identified within the terms of the overall contract, each such project
is treated as a separate contract. Provision is made in full where applicable for expected losses on
contracts in progress. Please refer to the paragraph “Construction contracts” for the accounting
policy on revenue from construction contracts for ship building and marine related activities.
(ii) Shipping
Revenue from time charter is recognised on the straight-line basis over the period of the time charter
agreement.
Revenue from voyage charter is recognised rateably over the estimated length of the voyage within
the reporting period and ends in the subsequent reporting period.
The Group determines the percentage of completion of voyage freight using the discharge-to-
discharge method. Under this method, voyage revenue is recognised rateably over the period from
the departure of a vessel from its original discharge port to departure from the next discharge port.
Demurrage is included if a claim is considered probable. Losses arising from time or voyage charters
are provided for as soon as they are anticipated.
(b) Rental income
Rental income from operating leases on investment properties and property, plant and equipment is
recognised on the straight-line basis over the lease term.
(c) Sale of scrap materials
Revenue from sale of scrap materials is recognised when the products have been delivered to the customer,
the customer has accepted the products and collectibility of the related receivables is reasonably assured.
(d) Interest income
Interest income is recognised using the effective interest method.
(e) Dividend income
Dividend income is recognised when the right to receive payment is established.