IBERSOL Annual Report 2018

ANNUAL REPORT 2018 Contingent liabilities are not recognized in the Company’s financial statements and are disclosed in these Notes to the Financial Statements, unless the possibility of an outflow of funds affecting future economic benefits is remote, in case they are not even disclosed. Contingent assets are possible assets that arise from past events and whose exist- ence will only be confirmed by the occurrence or not of one or more uncertain future events not wholly under the control of the Company. Contingent assets are not recognized in the Company’s financial statements but are disclosed in these Notes to the Financial Statements when it is probable that there will be a future economic benefit. 2.17 RECOGNISING REVENUE Revenue comprises the fair value of the sale of goods and rendering of services, net of taxes and discounts and after eliminating internal sales. Revenue is recognised as follows: a) Sale of goods - retail The sale of goods is recognised when the product is sold to the customer. Retail sales are normally made in cash or through debit/credit cards. Sales of goods to customers, associated to events or congresses, are recognised when they occur. b) Rendering of services Rendering of services is recognised in the accounting period in which the services are rendered, in reference to the transaction end date on the consolidated statement of financial position date. c) Royalties Royalties are recognised according to the accrual policy, according to the content of the relevant agreements. 2.18 LEASES Leases are classified as an operating lease if a significant part of the risks and ben- efits inherent to the possession remain the lessor’s responsibility. Payments in oper- ating leases (minus any incentives received from the lessor) are included in the con- solidated statement of comprehensive income by the equal annual amounts method during the leasing period. Leases of tangible assets where the group is substantially responsible for all the property’s risks and benefits are classified as a financial lease. Financial leasing is capitalised at the start of the lease by the lowest amount between the fair value of the leased asset and the current value of the minimum leasing values. Lease obliga- tions, net of financial charges, are included in other non-current liabilities, except for the respective short-term component. The interest parcel goes to financial expenses during the lease period, thereby producing a constant periodic interest rate on the remaining debt in each period. Tangible assets acquired through financial leasing are depreciated by the lowest amount between the asset’s lifetime and the lease period. 227