Revenue Recognition at Asb

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Business Accounting
Revenue Recognition

This document describes the Revenue Recognition methods that are currently employed at ASB(ASB):

Revenue Recognition Methods
The ASB revenue recognition policy follows the definitions and principles stated in the Nokia Accounting Standards as well as the relevant International Financial Reporting Standards (IFRS) mainly IAS 11 "Construction contracts" and IAS 18 "Revenue". ASB´s main revenue recognition methods are contract accounting, general revenue recognition and service revenue recognition methods.

Basic Revenue Recognition Criteria
Revenue can be recognized for majority of ASB sales (regardless of revenue recognition methods) when all the following criteria have been met: 1. A contract is in place (binding obligation) 2. Delivery has occurred: a. IAS 11 (contract accounting); delivery has occurred and services performed according to the contract delivery terms, b. IAS 18 (general revenue recognition); the significant risks and rewards of ownership (as defined in the contract) have transferred to the customer. 3. Continuing managerial involvement usually associated with ownership and effective control have ceased, 4. The amount of revenue can be measured reliably (the fee is fixed or determinable), 5. It is probable that economic benefits associated with the transaction will flow to ASB (collectibility is probable) and 6. The costs incurred or to be incurred in respect of the transaction can be measured reliably.

A) Contract Accounting (IAS 11)
Significant portion of ASB revenue is recognized in accordance with contract accounting principles. The revenue recognition rules for contract accounting are stated in IAS 11 "Construction contracts". In accordance with contract accounting rules, the sales and cost of sales from contracts involving solutions achieved…...

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