Annual report - HSE

5.5.7.14 Revenue
The sales revenue is recognised at fair value of the received payment of receivables,
namely decreased by discounts. The revenue is disclosed when the buyer assumes all
significant types of risks and benefits related to the ownership of the asset, when there is a
certainty in relation to recoverability of a fee and related costs or possibility of repayment
of products and when the Group stops deciding on products sold.
Sales of goods are recognised when the Group delivers the products to the client. The
client accepts the products, while the collectability of associated receivables is reasonably
ensured.
Sales of services is recognised in the accounting period in which the services are performed
as regards the conclusion of the transaction estimated on the basis of actually performed
service as the proportional portion of all services performed.
Revenue arising from default interests charges and related receivables are recognised
upon occurrence if it is probable that the economic benefits related to transaction will
inflow to companies. On the contrary, default interest charges are recorded as contingent
assets and are recognised in the Group’s books of account upon payments. Recording of
default interest is considered individually.
Other operating revenue related to operating effects are composed of revenue from the
reversal of provisions, revenue from utilisation of deferred revenue, gains arising from
sales of fixed assets, reversal of impairment of receivables, received compensations and
contractual penalties, and similar revenue (ex. government assistance).
Government assistance is considered as deferred revenue that a company strictly,
consistently and wisely recognises as other operating revenue over the useful life of the
relevant asset (on the other hand, the company discloses the amortisation/depreciation
cost of this asset among operating expenses).
Financial revenue comprises revenue from shares in investments, interest on loans
and deposits given and revenue of associates. Interest revenue is recognised upon its
occurrence, in the amount of agreed-upon interest rate.
5.5.7.15 Expenses
Expenses are recognised if a decrease in economic benefits in the accounting period gives
rise to a decrease in assets or increase in debt and this decrease can be reliably measured.
Operating expenses are recognised once costs are no longer held in inventories of products
and work in progress or once merchandise has been sold. Costs that cannot be held in
inventories of products and production in progress are recognised as operating expenses
upon their occurrence.
Costs of goods sold includes expenses related to the sales of electricity and contingent
costs of electricity. In case the Group has more negative than positive operating foreign
exchange differences, they are recorded as costs of goods sold.
Costs of materials are historical costs of materials purchased that are directly used for
creating products and services (direct costs of material), as well as costs of material that do
not have such characteristics and are included in relevant purpose (functional) groups of
indirect operating costs. The first subgroup includes costs of raw materials, other materials
and purchased parts and semi-finished products whose consumption can be related to
creating products and services. The second group includes costs of auxiliary materials
for maintenance of property, plant and equipment, small tools whose useful life does
not exceed one year, spare parts for servicing of products after their sale, office supplies,
specialised literature and other items. Costs of materials cover also the accrued costs of
shrinkage, spilling, breakage and failure.
Costs of services are historical costs of purchased services that are directly used for
creating products and services (costs of direct services) as well as costs of services that
do not have such characteristics and are included in adequate purpose (functional)
groups of indirect operating costs. The first group mostly includes the costs of services
for production of goods, while the second group includes mainly the costs of transport
services, maintenance services, services of fairs, marketing and entertainment, costs of
insurance premiums, payment transactions and other banking services (except interest),
rents, advisory services, business travels and similar services.
Annual Report HSE 2012
5 Financial Report of HSE Group
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