ANNUAL REPORT 2008 - Gorenje Group

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(ii) Revenue from services
Revenue from services rendered is recognised in profit or loss in proportion to the stage of completion
of the transaction at the reporting date. The stage of completion is assessed by reference
to surveys of work performed.
(iii) Commissions
When the Group acts in the capacity of an agent rather than as the principal in a transaction, the
revenue recognised is the net amount of commission made by the Group.
(iv) Rental income
Rental income from investment property is recognised in profit or loss on a straight-line basis over
the term of the lease. Lease incentives granted are recognised as an integral part of the total rental
income, over the term of the lease.
(n) Government grants
Government grants are recognised initially as deferred income when there is reasonable assurance
that they will be received and that the Group will comply with the conditions associated with the
grant. Grants that compensate the Group for expenses incurred are recognised in profit or loss on
a systematic basis in the same periods in which the expenses are recognised. Grants that compensate
the Group for the cost of an asset are recognised in profit or loss on a systematic basis over
the useful life of the asset.
(o) Finance income and expense
Finance income comprises interest income on funds invested (including available-for-sale financial
assets), dividend income, gains on the disposal of available-for-sale financial assets, changes in the
fair value of financial assets at fair value through profit or loss, and gains on hedging instruments
that are recognised in profit or loss. Interest income is recognised as it accrues in profit or loss, using
the effective interest method. Dividend income is recognised in profit or loss on the date that
the Group’s right to receive payment is established, which in the case of quoted securities is the exdividend
date.
Finance expense comprises interest expense on borrowings, foreign exchange losses, impairment
losses recognised on financial assets, and losses on hedging instruments that are recognised in
profit or loss. All borrowing costs are recognised in profit or loss using the effective interest method.
(p) Income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit
or loss except to the extent that it relates to items recognised directly in equity, in which case it
is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted
or substantively enacted at the reporting date, and any adjustment to tax payable in respect of
previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences
between the carrying amounts of assets and liabilities for financial reporting purposes and the
amounts used for taxation purposes. Deferred tax is not recognised for the following temporary
differences: the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit, and differences relating to investments
in subsidiaries and jointly controlled entities to the extent that it is probable that they will not
reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary
differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates