(1) This Procedure is applied in accounting for the recognition of revenue arising from the following transactions and events: (2) Refer to the Accounting (Financial) Policy. (3) Refer to the Accounting (Financial) Policy. (4) Revenue is measured at the fair value of the consideration received or receivable, where in most cases, the consideration is in the form of cash or cash equivalents. (5) Revenue is recognised when the amount of revenue can be reliably measured, it is probable that the future economic benefits will flow to the University and specific criteria have been met for each of the following activities as described below. (6) Financial assistance provided by the Australian Government is recognised in the year it was received or when the entitlement for the revenue is established. Most of the government grants and assistance received are considered to be a contribution. A contribution occurs when the University receives an asset without having to give equal value to the other party / parties of the transfer. (7) If the consideration received is in the form of a contribution, the income is to be recognised as revenue when all of the following conditions have been satisfied: (8) Income is therefore, only recognised when the University has control over the contribution, which is usually achieved through receipt or when entitlement for the revenue is established. If the government contributions are received with conditions attached, and contributions have to be refunded if the conditions are not met, then revenue should not be recognised until all of those conditions are met and treated as income in advance or monies held from the government. (9) Student fees and charges are recognised as revenue in the year which the service is provided to students. Student fees and charges received that relate to the service to be rendered in the future period are treated as income in advance. (10) Revenue recognition based on contracts to provide services require income to be recognised in stages of completion often as a percentage of services performed to the total of services to be provided as stipulated in the contract. (11) Revenue associated with the sale of services is recognised by reference to the stage of completion of the transaction at the reporting date when the outcome of a transaction involving the rendering of services can be estimated reliably. (12) The outcome of a transaction can be estimated reliably when all of the following conditions are satisfied: (13) Revenue is recognised only when it is probable that the economic benefits associated with the transaction will flow to the University. However, when an uncertainty arises about the collectability of an amount already included in revenue, the uncollectable amount, or the amount in respect of which recovery has ceased to be probable, is recognised as an expense, rather than as an adjustment of the amount of revenue originally recognised. (14) Revenue from sales of goods comprises revenue earned (net of returns, discounts and allowances) from the supply of goods or products to entities outside the University. (15) Revenue from the sale of goods shall be recognised when all the following conditions have been satisfied: (16) Interest income shall be recognised on a time proportion basis using the effective interest method. When a receivable is impaired, the carrying amount shall be reduced to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. (17) Fees and royalties paid for the use of the University’s assets are recognised on an accrual basis in accordance with the substance of the relevant agreement. (18) Dividend income is recognised when the dividend is declared by the controlled entity or investee. (19) Other revenue represents miscellaneous income and other grant income not derived from core business and is recognised when it is earned (20) For the purpose of this Procedure:Accounting Procedure - Revenue Recognition
Section 1 - Background and Purpose
Top of PageSection 2 - Scope
Section 3 - Policy Statement
Section 4 - Procedure
Measurement of Revenue
Recognition of Revenue
Government Grants and Assistance
Student Fees and Charges
Rendering of Services
Sale of Goods
Interest, Royalties and Dividends
Other Revenue
Section 5 - Definition
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