By-Products and Net Sales
The revenue
generated from the sale of such products has always to be recorded as a cost
reduction within the type of cost 'By-Products and Other Revenues' as described
in 'Segment Decision Tree''. It is therefore theoretically possible for certain cost
centers to become negative.
Under certain circumstances a support process can become a product sub-segment
according to the 20% and USD 1 Million rule and when it is producing products for or providing services to third parties.
Examples of by-products are revenues of:
• Scrap metal recycling
• Long distance heat sale
• Electricity co-generation
• Kiln dust sale
• Cafeteria and canteen services
• Inert fill activities in product sub-segment clinker and cement
Net Sales - Other
In the product
sub-segments 'Aggregates' and 'Ready-Mix Concrete'
certain non-core revenues have to be recognized separately from
regular Net Sales Product Groups as
described in Net Sales section.
Note that cost
recoveries (e.g. the sale of diesel normally used in the production process to
third parties) are to be disclosed in their respective type of cost (e.g.
'Diesel / Gasoline'). This results in the correct reflection of this type of
cost within any cost center.
Examples of cost recoveries:
• The incidental sale of raw material aggregates by a ready-mix plant to its customers is reflected as a negative cost entry in type of cost 'Raw Materials' within main cost center 'Ready-Mix Concrete Production'.
• Revenues generated from own employees working occasionally for a third party company are disclosed as cost reduction within type of cost 'Labor Expenses Own' in the cost center this employee's salary normally is charged to.
Normally however, items of income and expenditure are not offset. IAS 1 para.
34 requires that items of income and
expense should be offset when, and only when:
• An international accounting standard requires or permits it
• Gains, losses and related expenses arising from the same or similar transactions and events are not material
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