Sale of goods
Revenue from the sale of goods is recognized when the significant risks and
rewards of ownership have been transferred to the buyer, usually on delivery of
the goods and when the amount of revenue can be measured reliably and it is
probable that the economic benefits or service potential associated with the
transaction will flow to the LGU.
Interest income
Interest income is accrued using the effective yield method. The effective yield
discounts estimated future cash receipts through the expected life of the financial
asset to that asset’s net carrying amount. The method applies this yield to the
principal outstanding to determine interest income each period.
Rental income
Rental income arising from operating leases on investment properties is
accounted for on a straight-line basis over the lease terms and included in
revenue.
3.4 Investment Property
Investment properties are measured initially at cost, including transaction costs.
The carrying amount includes the replacement cost of components of an existing
investment property at the time that cost is incurred if the recognition criteria are
met and exclude the costs of the day-to-day maintenance of an investment
property.
Investment property acquired through a non-exchange transaction is measured at
its fair value at the date of acquisition. Subsequent to initial recognition,
investment properties are measured using the cost model and are depreciated over
a 30-year period.
Investment properties are derecognized either when they have been disposed of
or when the investment property is permanently withdrawn from use and no
future economic benefit or service potential is expected from its disposal. The
difference between the net disposal proceeds and the carrying amount of the asset
is recognized in the surplus or deficit in the period of derecognition. Transfers are
made to or from investment property only when there is a change in use.
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