NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2024 2. Summary of material accounting policies information (cont’d) 2.25 Revenue Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. Revenue is recognised when the Group satisfies a performance obligation by transferring a promised good or service to the customer, which is when the customer obtains control of the good or service. A performance obligation may be satisfied at a point in time or over time. The amount of revenue recognised is the amount allocated to the satisfied performance obligation. (a) Sale of goods Revenue from sales arising from physical delivery of CPO, palm kernel (“PK”), palm-based products, edible oils and other agricultural products is recognised when the goods are delivered to the customer and all criteria for acceptance have been satisfied. Certain contracts with customers within the respective business segments give rise to variable considerations. The Group estimates the variable considerations such as right of return and price adjustments arising from product quality and changes in selling price based on sales volume, using expected value developed based on historical experience or using most likely amount developed based on historical experience taking into account also current purchasing patterns. The management established estimation method that ensure inclusion of these variable consideration only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Meanwhile, the recognition is made when supporting documents have been received from customers or when it is probable price adjustments will be given. Trade receivable is recognised if an amount of consideration that is unconditional is due from the customer (i.e., only the passage of time is required before payment of the consideration is due). If a customer pays consideration before the Group transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Group transfers goods under the contract. (b) Interest income Interest income is recognised using the effective interest method. (c) Rental and storage income Rental and storage income is recognised on a straight-line basis over the lease terms on an ongoing basis. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis. (d) Dividend income Dividend income is recognised when the right to receive payment is established. Group Overview Financials Other information Sustainability and Governance Operation and Financial Review Indofood Agri Resources Ltd. 92
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