ANNUAL REPORT 2010/11 - Schumag AG

SCHUMAG AG 452.3.2 Revenue recognition: Revenue recognition:Revenues are always recorded if it is likelythat the economic benefit will go to the Groupand that the amount of this benefit can be reliablydetermined. Revenues from goods sales arerecognized upon shipment of the products andgoods to customers if the transfer of risks to thebuyer can be assumed on the basis of variousindicators relating to the order. In this connectionprovisions for potential discounts or other pricereductions are recorded. Potential risks arisingfrom complaints about products and goods anddue to warranty are deferred. Revenues fromservices are recorded as soon as the service hasbeen rendered. Income from interest is recognizedpro rata temporis according to the outstandingreceivables as of the balance sheet date and theinterest rates to be applied according to theeffective interest method. Rental income fromoperating leases, in particular in connection withthe property held as a financial investment, arerecorded for the term of the corresponding leases.Revenues from long-term constructioncontracts as well as income under licenseagreements from the sale or granting of licencesto technologies do not accrue any more since thesale of the mechanical engineering division.