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

4  Changes in accounting policies
From January 1, 2020, the Group applied 
Definition of a Business (Amendments to IFRS 
3 Business Combinations)
 to determine whether 
it had acquired a business or a group of assets 
in acquisitions after that date. The details of 
accounting policies are set out in note 3(c).
A number of other new standards are effective 
from January 1, 2020 but they do not have a 
material effect on the Group’s consolidated 
financial statements.
5  Accounting judgements and 
estimates
(a) Accounting  judgements
(i) Revenue recognition
Revenue is recognised when control of a 
good or service is transferred to a customer 
as disclosed in note 3(p). To determine the 
satisfaction of performance obligations the 
Group applies the following judgements:
■
  Where revenue is recognised over time, the 
Group primarily uses the output method 
to measure progress; however, in a limited 
number of business units, the input method 
is adopted when the Group is unable 
to reasonably measure the outcome of 
a performance obligation. Judgements 
applied when using the output method 
include assessing progress and milestones 
achieved and determining if that represents 
the value of goods and/or services delivered 
to the customer to date. Judgements 
applied when using the input method 
include determining if consumption of the 
resources relative to the total expected 
amount faithfully depicts the transfer of 
control of goods and/or services promised 
to the customer.

---

100
       
Huawei Investment & Holding Co., Ltd.
■
  Where revenue is recognised at a point 
in time, the Group assesses the transfer 
of control by reference to the contractual 
terms and the circumstance of the 
arrangements including a consideration 
of past business practice, such as whether 
the Group has a legal right to payment, 
title has passed, the customer has the risks 
and rewards of ownership, or the customer 
is using the asset to generate value for 
themselves.
■
  For sales to distribution channels, 
judgement is also applied in determining 
when the control of the goods is 
transferred to distributors. These 
judgements involve several external and 
internal factors including, but not limited 
to, market conditions, product life cycles, 
distributor sales, competitive conditions 
and the extent to which the Group has 
continuing managerial involvement over the 
goods after their delivery.