Page 252 - SAMRC Annual Report 2023-24

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024
SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)

1.18 Revenue from exchange transactions
Revenue is the gross inflow of economic benefits or service potential during the reporting period when
those inflows result in an increase in net assets, other than increases relating to contributions from owners.

An exchange transaction is one in which the entity receives assets or services, or has liabilities extinguished,
and directly gives approximately equal value (primarily in the form of goods, services or use of assets) to
the other party in exchange.

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable,
willing parties in an arm’s length transaction.

Measurement
Revenue is measured at the fair value of the consideration received or receivable.

Sale of goods
Revenue from the sale of goods is recognised when all the following conditions have been satisfied:
• the entity has transferred to the purchaser the significant risks and rewards of ownership of the goods;
• the entity retains neither continuing managerial involvement to the degree usually associated with
ownership nor effective control over the goods sold;
• the amount of revenue can be measured reliably;
• it is probable that the economic benefits or service potential associated with the transaction will flow
to the entity; and
• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue derived from the sale of animal blood; dietary assessment kits and nutritional textbooks and sale
of biological assets are classified as sale of goods.

Rendering of services
When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue
associated with the transaction is recognised by reference to the stage of completion of the transaction
at the reporting date. The outcome of a transaction can be estimated reliably when all the following
conditions are satisfied:
• the amount of revenue can be measured reliably;
• it is probable that the economic benefits or service potential associated with the transaction will flow to
the entity;
• the stage of completion of the transaction at the reporting date can be measured reliably; and
• the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.
When services are performed by an indeterminate number of acts over a specified time frame, revenue is
recognised on a straight line basis over the specified time frame unless there is evidence that some other
method better represents the stage of completion. When a specific act is much more significant than any
other acts, the recognition of revenue is postponed until the significant act is executed.
When the outcome of the transaction involving the rendering of services cannot be estimated reliably,
revenue is recognised only to the extent of the expenses recognised that are recoverable.

Consulting and research service revenue is recognised by reference to the stage of completion of the
transaction at the reporting date. Stage of completion is determined by the proportion that costs incurred
to date bear to the total estimated costs of the transaction.

250 SAMRC ANNUAL REPOR T 2023-24