Annual Report 2013

Notes to the consolidated statement of income

(22) Sale proceeds and principles of income recognition

Sales remained approximately at the previous year’s level, at 16,355 million euros. Revenues and their development by business unit and region are summarized in the Group segment report and in the key financials by region see here and here. A detailed explanation of the development of major income and expense items can be found in the Group management report see here

Sales comprise sales of goods and services less direct sales deductions such as customer-related rebates, credits and other benefits paid or granted. Sales are recognized once the goods have been delivered or the service has been performed. In the case of goods, this coincides with the physical delivery and so-called transfer of risks and rewards. Henkel uses different terms of delivery that contractually determine the transfer of risks and rewards. It must also be probable that the economic benefits associated with the transaction will flow to the Group, and the costs incurred with respect to the transaction must be reliably measurable.

Services are generally provided in conjunction with the sale of goods, and recorded once the service has been performed. No sale is recognized if there are significant risks relating to the receipt of the consideration or it is likely that the goods will be returned.

Interest income is recognized on a time-proportion basis that takes into account the effective yield on the asset and the interest rate in force. Dividend income from investments is recognized when the shareholders’ right to receive payment is legally established.