2. Significant accounting policies (cont’d.) 2.3 Summary of significant accounting policies (cont’d.) (v) Revenue recognition (cont’d.) (iii) Lightering income Income from lightering charges is recognised on percentage of completion of voyages, calculated on a discharge-to-discharge basis. The voyage revenue is recognised evenly over the period from a ship’s departure from its previous discharge point to its projected departure from its next discharge point. (iv) Other shipping related income and non-shipping income Revenue from services rendered is recognised net of service taxes and discounts as and when the services are performed. (v) Finance income on lease receivables Finance income on lease receivables is recognised according to the effective interest rate method so as to provide constant periodic rate of return on the net investment. (vi) Construction contracts Revenue from construction contracts is accounted for in accordance with the policy set out in Note 2.3(f). (vii) Rental income Rental income from an investment property is recognised on a straight-line basis over the term of the lease. The aggregate cost of incentives provided to lessee is recognised as a reduction of rental income over the lease term on a straight-line basis. (viii) Interest income Interest income is recognised on an accrual basis using the effective interest method. (ix) Dividend income Dividend income is recognised when the Group’s right to receive payment is established. Financial Statements 197
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