Annual Report 2005 - Publications Unit - The University of Western ...

1. Summary of significant accounting policies (continued)THE UNIVERSITY OF WESTERN AUSTRALIANOTES TO THE FINANCIAL STATEMENTS31 DECEMBER 2005(e)RevenueRevenue is recognised at the fair value of the consideration received or receivable. Revenue is recognised net ofreturns, allowances and taxes paid. Revenue is recognised as follows for major activities:Sale of goods:Revenue on the sale of goods to be recognised by the University when the goods have been despatched and theassociated risk of ownership has passed to the customer.Rendering of services:Revenue is recognised in accordance with the percentage of completion method unless the outcome of the contractcannot be reliably measured. The stage of completion is determined by reference to expenditure incurred to date as aproportion of the total expenditure. If the outcome cannot be reliably measured, where it is probable that the costs willbe recovered, revenue is recognised to the extent of costs incurred.Contributions:Contributions are non-reciprocal transfers and are recognised as revenue at fair value when the University obtainscontrol of the contributions and it is probable that future economic benefit will flow to the University.(f)Cash and cash equivalentsCash and cash equivalents includes cash on hand, bank accounts and other short-term, highly liquid investments thatare readily convertible to known amounts of cash, and which are subject to an insignificant risk of changes in value.(g)ReceivablesReceivables are recognised at amortised cost less provision for doubtful debts. Collectibility is reviewed on an ongoingbasis and those specifically determined to be uncollectible are written off. The provision is determined from objectiveevidence that not all amounts will be able to be collected.(h)InventoriesInventories are valued at the lower of cost and net realisable value. Cost is assigned on a first-in first-out basis.(i)Non-current assets classified as held for saleNon-current assets are classified as assets held for sale if their carrying amount will be recovered principally through asale transaction rather than through continuing use. Non-current assets held for sale are recognised at the lower ofcarrying amount and fair value less costs to sell.41