2009 - TDM Berhad

80 TDM Berhad (6265-P)Notes to the Financial Statements2. Significant Accounting Policies (cont’d.)2.2 Summary of significant accounting policies (cont’d.)(n) Revenue recognitionRevenue is recognised to the extent that it is probable that the economic benefi ts will fl ow to the Group and the revenue canbe reliably measured. The following specifi c recognition criteria must also be met before revenue is recognised:(i)Sale of goodsRevenue is recognised net of sales taxes and upon transfer of signifi cant risks and rewards of ownership to the buyer.(ii)Revenue from servicesRevenue from services rendered is recognised net of service taxes and discounts as and when the services areperformed.(iii)Interest incomeInterest income is recognised on an accrual basis using the effective interest method.(iv)Dividend incomeDividend income is recognised when the Group’s right to receive payment is established.(v)Management feesManagement fees are recognised when services are rendered.(vi)Deferred revenueThe deferred revenue relates to advanced payment received from a supplier which will be amortised over the supply ofcrude unbleached palm oil.(o)GoodwillGoodwill acquired in a business combination is initially measured at cost being the excess of the cost of business combinationover the Group’s interest in the net fair value of the identifi able assets, liabilities and contingent liabilities. Following the initialrecognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised but instead, itis reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying valuemay be impaired. Gains or losses on the disposal of an entity include the carrying amount of goodwill relating to entity sold.(p)Leases(i) ClassificationA lease is recognised as a fi nance lease if it transfers substantially to the Group all the risks and rewards incidental toownership. Lease of land is classifi ed as operating or fi nance leases in the same way as leases of other assets andthe land and buildings elements of a lease of land and buildings are considered separately for the purposes of leaseclassifi cation.