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Notes to the Consolidated Financial Statements


               31st March 2017


               2   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


                   2.22 Provisions

                        Provisions are recognised when the Group has a present legal or constructive obligation as a result
                        of past events; it is probable that an outflow of resources will be required to settle the obligation;
                        and  the  amount  has  been  reliably  estimated.  Provisions  are  not  recognised  for  future  operating
                        losses.


                        Where  there  are  a  number  of  similar  obligations,  the  likelihood  that  an  outflow  will  be  required
                        in  settlement  is  determined  by  considering  the  class  of  obligations  as  a  whole.  A  provision  is
                        recognised even if the likelihood of an outflow with respect to any one item included in the same
                        class of obligations may be small.

                        Provisions are measured at the present value of the expenditures expected to be required to settle
                        the obligation using a pre-tax rate that reflects current market assessments of the time value of
                        money and the risks specific to the obligation. The increase in the provision due to passage of time
                        is recognised as interest expense.

                   2.23 Revenue recognition


                        Revenue comprises the fair value of the consideration received or receivable for the sale of goods
                        and  services  in  the  ordinary  course  of  the  Group’s  activities.  Revenue  is  shown  net  of  value
                        added tax, returns, rebates and discounts and after eliminating sales within the Group. The Group
                        recognises  revenue  when  the  amount  of  revenue  can  be  reliably  measured,  it  is  probable  that
                        future economic benefits will flow to the entity and when specific criteria have been met for each of
                        the Group’s activities as described below:

                        (i)   Sales of goods are recognised when a group entity has delivered products to the customer,
                            the  customer  has  accepted  the  products  and  collectability  of  the  related  receivables  is
                            reasonably assured.


                        (ii)   Rental income is recognised on a straight-line basis over the periods of the respective leases.


                        (iii)  Interest income is recognised on a time-proportion basis using the effective interest method.
                            When  a  receivable  is  impaired,  the  Group  reduces  the  carrying  amount  to  its  recoverable
                            amount, being the estimated future cash flow discounted at the original effective interest rate
                            of the instrument, and continues unwinding the discount as interest income.
















         68    ALCO HOLDINGS LIMITED  ANNUAL REPORT 2017
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