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Notes To The Consolidated Financial Statements
(Expressed in Renminbi)
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/ China Communications Services Corporation Limited
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Significant accounting policies
(continued)
(w) Revenue recognition
(continued)
(ii)
Services rendered
Revenue from design services rendered is recognised in the consolidated income statement in
proportion to the stage of completion of the transaction at the balance sheet date.
Revenue from other services rendered is recognised upon the delivery or performance of the
services.
(iii) Sales of goods
Revenue is recognised when goods are delivered at the customers’ premises which is taken
to be the point in time when the customer has accepted the goods and the related risks and
rewards of ownership. Revenue excludes value added tax or other sales taxes and is after
deduction of any trade discounts.
(iv) Rental income from operating leases
Rental income receivable under operating leases is recognised in the consolidated income
statement in equal instalments over the periods covered by the lease term, except where
an alternative basis is more representative of the pattern of benefits to be derived from the
use of the leased asset. Lease incentives granted are recognised in the consolidated income
statement as an integral part of the aggregate net lease payments receivable. Contingent
rentals are recognised as income in the accounting period in which they are earned.
(v)
Dividends
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Dividend income from unlisted investments is recognised when the shareholder’s right
to receive payment is established.
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Dividend income from listed investments is recognised when the share price of the
investment goes ex-dividend.
(vi) Interest income
Interest income is recognised as it accrues using the effective interest method.
(x) Government grants
Government grants are recognised in the consolidated balance sheet initially when there is reasonable
assurance that they will be received and that the Group will comply with the conditions attaching to
them. Grants that compensate the Group for expenses incurred are recognised as revenue in the
consolidated income statement on a systematic basis in the same periods in which the expenses are
incurred. Grants that compensate the Group for the cost of an asset are deducted from the carrying
amount of the asset and consequently are recognised in the consolidated income statement over the
useful life of the asset by way of reduced depreciation expenses.