BHP Billiton is the world's largest diversified resources company. Its core operations involve production of aluminium, copper,
Question:
BHP Billiton is the world's largest diversified resources company. Its core operations involve production of aluminium, copper, zinc, iron ore, diamonds, oil and gas.
Read the following excerpt from the 2014 annual report of BHP Billiton.
Explain when BHP recognises revenue in terms that your fellow students will understand.
Transcribed Image Text:
SALES REVENUE Revenue from the sale of goods and disposal of other assets is recognised when persuasive evidence (usually in the form of an executed sales agreement) of an arrangement exists and; . there has been a transfer of risks and rewards to the customer; no further work or processing is required by the Group; the quantity and quality of the goods has been determined with reasonable accuracy; the price is fixed or determinable, collectability is reasonably assured. Revenue is therefore generally recognised when title passes. In the majority of sales for most commodities, sales agreements specify that title passes on the bill of lading date, which is the date the commodity is delivered to the shipping agent. For these sales, revenue is recognised on the bill of lading date. For certain sales (principally coal sales to adjoining power stations and diamond sales), title passes and revenue is recognised when the goods have been delivered.
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BHP Billiton recognizes revenue when a sale is pretty much a done deal and when all the major steps ...View the full answer
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Related Book For
Financial Accounting An Integrated Approach
ISBN: 9780170349680
6th Edition
Authors: Ken Trotman, Michael Gibbins, Elizabeth Carson
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