Strength & Stability - ECS Holdings Limited

2 Summary of Significant Accounting Policies (Cont’d)
2.12 Financial Guarantee Contracts
Financial guarantee contracts are regarded as insurance contracts under which the Group accepts significant insurance risk from a
third party by agreeing to compensate that party on the occurrence of a specified uncertain future event. Provisions are recognised
when it is probable that the guarantee will be called upon and an outflow of resources embodying economic benefits will be required
to settle the obligations.
2.13 Revenue Recognition
Sale of goods
Revenue from the sale of goods which encompasses distribution of e-enabling infrastructure and IT products is measured at the
fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue
is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration
is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management
involvement with the goods, and the amount of revenue can be measured reliably.
Transfers of risks and rewards vary depending on the individual terms of the contract of sale. For sales of IT products, transfer usually
occurs when the product is received at the customer’s warehouse; however, for some international shipments, transfer occurs upon
loading of the goods on to the relevant carrier.
Service fees
Fees from service maintenance contracts are recognised over the period of the contract.
Project revenue
Revenue on projects is recognised in the income statement based on the percentage of completion method, measured by reference to
the percentage of contract costs incurred to date to estimated total contract costs for the contract.
Notes to the
Financial Statements
These notes form an integral part of the financial statements.
Annual Report 2008
p.
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