Founded in 1987, Huawei is a leading global provider of information and communications

(i) Revenue recognition
To determine the transaction price and the 
amounts allocated to performance obligations 
the Group applies the following estimation:
■
  Variable consideration is estimated using 
the most likely amount or expected 
value based on the nature of the specific 
consideration and the analysis of relevant 
contract terms, taking into consideration 
historical, current and expected 
information.
■
  SSP is determined using observable 
evidence of sales prices, where available. 
In a number of cases statistical analysis 
is used to identify the historical price a 
product/service has been sold for as its SSP. 
Where observable evidence is not available, 
SSP is estimated using multiple inputs (see 
note 3(p)(i)vii). SSP is monitored regularly 
to ensure they remain appropriate.
■
  Obligations for returns and refunds are 
judged based on estimates made from 
historical information associated with 
similar products and anticipated rates of 
claims for the products.
■
  The collectability of a consideration is 
estimated at contract inception, based on 
the Group’s assessment on the customer’s 
ability and intention to pay when due 
and is reassessed if there are significant 
changes in the facts and circumstances.
Estimation is inherent in revenue recognition 
and revenue may materially change if 
management’s estimation were to change or 
to be found inaccurate or the occurrence of 
unexpected events.

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2020 Annual Report