Cordlife Group Limited
Annual Report 2016
73
Notes to
The Financial Statements
for the financial year ended 30 June 2016
2.
Summary of significant accounting policies (cont’d)
2.22 Leases (cont’d)
As lessee (cont’d)
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the
lease term if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.
Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease
term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense
over the lease term on a straight-line basis.
As lessor
Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified
as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying
amount of the leased asset and recognised over the lease term on the same bases as rental income. The
accounting policy for rental income is set out in Note 2.23. Contingent rents are recognised as revenue in the
period in which they are earned.
2.23 Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the revenue can be reliably measured, regardless of when the payment is made. Revenue is measured at the
fair value of consideration received or receivable, taking into account contractually defined terms of payment
and excluding discounts, rebates and sales taxes or duty. The Group assesses its revenue arrangements to
determine if it is acting as principal or agent. The following specific recognition criteria must also be met before
revenue is recognised:
Rendering of services
Revenue from cord blood banking contracts and cord lining banking services is recognised by reference to the
stage of completion of the service. Stage of completion is measured by reference to the percentage of costs
incurred to estimated total costs to complete the contracts.
Revenue received in advance for services to be rendered under cord blood and cord lining banking contracts is
accounted for as deferred revenue on the statements of financial position.
Sale of goods
Revenue from sale of goods is recognised upon the transfer of significant risk and rewards of ownership of the
goods to the customer, usually on delivery of goods. Revenue is not recognised to the extent where there are
significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of
goods.
Interest income
Interest income is recognised using the effective interest method.
Rental income
Rental income arising from operating leases on investment properties is accounted for on a straight-line basis
over the lease terms. The aggregate costs of incentives provided to lessees are recognised as a reduction of
rental income over the lease term on a straight-line basis.
