47153 AG Barr Annual Report 2025 AW4 SQ WEB - Flipbook - Page 149
Strategic Report
Corporate Governance
Accounts
Revenue recognition
Revenue is recognised when control of the goods has passed to the buyer. All revenue is recognised on a point of time basis being primarily the point of delivery to customers’
sites. The majority of goods are dispatched by the Group’s own distribution network and delivery often occurs on the day of dispatch although some are a few days later,
therefore, revenue is recognised on delivery to the customer site. None of the Group’s contractual arrangements lead to revenue being recognised over time.
Revenue is the net invoiced sales value, after deducting promotional sales related discounts invoiced by customers, including: brand support costs; customer incentives;
and exclusive of value added tax of goods and services supplied to external customers during the year. Brand support costs are investments in customer promotional
activities. Sales are recorded based on the price specified in the sales invoices, net of any agreed discounts and rebates. Brand support accruals are included in the
statement of financial position.
Sales related discounts and rebates are calculated based on the expected amounts necessary to meet the claims of the Group’s customers in respect of these discounts
and rebates. When the Group expects to grant a discount or rebate to a customer, this is treated as variable consideration and adjustments are made to the transaction
price using the expected value method. This variable consideration is only included to the extent that it is highly probable the inclusion will not result in a significant revenue
reversal in the future.
Excise tax
For the cocktail business, excise duties become payable on alcoholic products when goods are moved from bonded warehouses. This duty is effectively a production tax,
borne by the Group and passed on in full to customers through pricing. Excise duty on our own-produced goods are included within cost of goods sold and net revenue
as all sales are delivered duty paid.
Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses
that relate to transactions with any of the Group’s other components and for which discrete financial information is available. Segment results that are reported to the Board
and senior executives (as chief operating decision makers) include items directly attributable to a segment as well as those that can be allocated on a consistent basis.
Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates
(“the functional currency”). The consolidated financial statements are presented in £ Sterling, which is the Company’s functional and the Group’s presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are
remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in the income statement in the same line in which the transaction is recorded.
Intangible assets
Goodwill
Goodwill represents the excess of the consideration of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary at the
date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is tested annually for impairment and carried at cost less accumulated
impairment charges. Impairment charges on goodwill are not reversed. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation
is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose.
An intangible asset acquired as part of a business combination is recognised outside of goodwill if the asset is separable or arises from contractual or other legal rights
and its fair value can be measured reliably.
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