B26 GROUP 6
TRAN THI THUY LINH
NGUYEN THAI DUNG
DEPARTMENT OF FINANCE & ACCOUNTING
SCHOOL OF BUSINESS
NATIONAL UNIVERSITY OF SINGAPORE
Hyflux is a water and fluid treatment company. While the Hyflux Company main activities are investing on subsidiary companies and producing membrane system, the nature of business undertaken by Hyflux Group includes trading and manufacturing.
Main types of revenue include sale of industrial processes: separation, concentration and purification treatments for manufacturing process streams; water treatment processes and products like seawater desalination, raw water purification, wastewater cleaning, water recycling, water reclamation and ultra pure water production for municipal and industrial clients. In fiscal year 2004, industrial products sale contributes 73%, ie. nearly 65 millions, to its revenue of 88.7 millions S$. The rest is contributed by selling of municipal products (19%) and consumer products (8%). Revenue comes mainly from China (82%) and Singapore (10%)
Main types of expense are raw materials and consumables used (35,917,000S$), personnel expenses (9,302,000S$) and deprecation & amortization costs (3,533,000S$). In 2004, no cost for development, which used to be one of main expenses in 2003.
\u201cRevenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
When the outcome of a contract can be reliably measured
- Revenue is recognised using the percentage-of-completion method, measured by the
contract value of work performed to date (based on project milestones) to estimated total
When the outcome of a contract cannot be reliably measured
- Revenue is recognised only to the extent of contract costs incurred that is probable to be
Revenue is recognised upon the transfer of significant risk and rewards of ownership of the goods to the customer which generally coincides with delivery and acceptance of the goods sold.
The revenue recognition for Interest and projects, contracts, which can be reliably measured, are correct, as these above statements imply that they will record only part of the total revenue, which is earned during the accounting period.
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