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30 | NEUROLOGICAL FOUNDATION REVENUE RECOGNITION REVENUE FROM EXCHANGE TRANSACTIONS Membership subscriptions Revenue is recognised by the Foundation at the point at which cash is received. Membership subscriptions are non-refundable and enable members to attend and vote at the Foundation’s Annual General Meeting (AGM). REVENUE FROM NON-EXCHANGE TRANSACTIONS Non-exchange transactions are those where the Foundation receives an inflow of resources (i.e. cash and other tangible or intangible items) but provides no (or nominal) direct consideration in return. With the exception of services-in-kind, inflows of resources from non-exchange transactions are only recognised as assets where both: • It is probable that the associated future economic benefit or service potential will flow to the entity, and • Fair value is reliably measurable. Inflows of resources from non-exchange transactions that are recognised as assets are recognised as non-exchange revenue, to the extent that a liability is not recognised in respect to the same inflow. Liabilities are recognised in relation to inflows of resources from non-exchange transactions when there is a resulting present obligation as a result of the non-exchange transactions, where both: • It is probable that an outflow of resources embodying future economic benefit or service potential will be required to settle the obligation, and • The amount of the obligation can be reliably estimated. The following specific recognition criteria in relation to the Foundation’s non-exchange transaction revenue streams must also be met before revenue is recognised. Fundraising The Foundation's fundraising activities involve direct mail newsletters four times per year, a direct mail household appeal once a year and other ongoing smaller initiatives. Fundraising non-exchange revenue is recognised at the point at which cash is received. Grants, donations, legacies and bequests The recognition of non-exchange revenue from grants, donations, legacies and bequests depends on the nature of any stipulations attached to the inflow of resources received, and whether this creates a liability (i.e. present obligation) rather than the recognition of revenue. Stipulations that are ‘conditions’ specifically require the Foundation to return the inflow of resources received if they are not utilised in the way stipulated, resulting in the recognition of a non-exchange liability that is subsequently recognised as non-exchange revenue as and when the ‘conditions’ are satisfied. Stipulations that are ‘restrictions’ do not specifically require the Foundation to return the inflow of resources received if they are not utilised in the way stipulated, and therefore do not result in the recognition of a non-exchange liability, which results in the immediate recognition of non-exchange revenue. EXPENSES Grants Grants made by the Foundation to another party are recognised as an expense in the Statement of comprehensive revenue and expense at the point at which the payment is made, or at the point that there is a liability meeting the recognition criteria for liabilities. Finance income and expenses Finance income comprises interest income, dividend income, gains on the disposal of available-for-sale financial assets, changes in the fair value of financial assets at fair value through surplus or loss, foreign currency gains, and gains on hedging instruments that are recognised in the Statement of comprehensive revenue and expense. Interest income is recognised as it accrues, using the effective interest method. Dividend income is recognised on the date that the Foundation's right to receive payment is established, which in the case of quoted securities is the ex-dividend date. Finance expense comprise interest expense on borrowings, unwinding of the discount on provisions, foreign currency losses, changes in the fair value of financial assets at fair value through surplus or loss, impairment losses recognised on financial assets (except for trade receivables), and losses on the disposal of available-for-sale financial assets. All borrowing costs are recognised in the Statement of comprehensive revenue and expense using the effective interest method.