Uster Technologies Ltd | Annual Report 2009 Uster Technologies ...

3.13 Revenue RecognitionRevenue from the sale of testing instrumentation is measured at the fair value of the consideration received orreceivable net of returns, discounts and volume rebates, sales taxes and duty. Revenue is recognized whenthe significant risks and rewards of ownership of the goods have passed to the buyer; it is probable thatthe economic benefits associated with the transaction will flow to the entity, the associated costs incurredor to be incurred can be estimated reliably, and the amount of revenue can be measured reliably.The transfer of risks and rewards for products and spare parts sold usually occurs when they are received bythe client at the port of entry. However, sometimes the risks and rewards are already transferred to the clientas soon as the products and spare parts leave an entity of the Uster Group.Revenue from service contracts relating to maintenance of testing instrumentation sold is recognized on a prorata basis over the contract period. The length of the service contracts usually varies between 3 and 12 months.3.14 Finance Income and ExpensesFinance income includes interest income on funds invested as well as changes in the fair value of the interestrate swap described in note 4.3 Market Risk. Interest income is recognized as it accrues in profit or loss usingthe effective interest rate method.Finance expenses comprise interest expense on loans, changes in the fair value of the interest rate swapdescribed in note 4.3 Market Risk, and impairment losses recognized on non derivative financial instrumentswith the exception of accounts receivable trade for which the valuation allowance is recorded under salesdeductions. All interest expenses on loans are recognized in profit or loss using the effective interest ratemethod.3.15 Income TaxIncome tax includes current and deferred tax. Income tax is recognized over the Statement of ComprehensiveIncome except to the extent that it relates to items recognized directly in equity or in other comprehensiveincome, in which case it is recognized in equity or other comprehensive income.Current Income TaxCurrent income tax assets and liabilities for the current and prior periods are measured at the amount expectedto be recovered from or paid to the tax authorities. The tax rates and tax laws used to compute theamount are those that are enacted or substantively enacted at the reporting date.Deferred TaxDeferred income tax is provided using the liability method on temporary differences at the reporting datebetween the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.Deferred income tax recognized for all taxable temporary differences except:• If the deferred income tax arises from the initial recognition of an asset or liability in a transaction that isnot a business combination and, at the time of the transaction, affects neither the accounting profit northe taxable profit or loss;• With respect to the taxable temporary differences associated with investments in subsidiaries where thetiming of the reversal of the temporary differences can be controlled and it is probable that the temporarydifferences will not reverse in the foreseeable future;• On taxable temporary differences arising on the initial recognition of goodwill.68 Uster Group – Notes to the Consolidated Financial Statements 2009