Revenue Recognition Revenue from products and services A. Significant accounting policy Year ended December 31, 2018 For the 2018 financial year, we recognized revenue from all sources based on the provisions of the U.S. SECs Staff Accounting Bulletin No. 104 and ASC 605 Revenue Recognition. The Companys revenue represents revenue from sales of products, provision of services and collaborative research and development agreements. We recognize revenue from sales of products at the time title of goods passes to the buyer and the buyer assumes the risks and rewards of ownership, assuming all other revenue recognition criteria have been met. Generally, this is at the time products are shipped to the customer. Revenue from services is recognized when a persuasive evidence of an arrangement exists, services have been rendered, the price is fixed or determinable. Year ended December 31, 2019 We recognize revenue from all sources, other than those received from LifeScan as outlined below, based on the provisions of ASC 606 Revenue from Contracts with Customers. Revenue is measured based on a consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The modified retrospective method has been used in adopting the guidance of ASC 606. There has been no change in accounting principle and the financial statements have not been affected by the application of the guidance in ASC 606. During the 2018 financial year, LifeScan effected the LifeScan Conversion. As a result of the LifeScan Conversion, beyond the 2018 financial year, the Company will no longer receive any quarterly service fees from LifeScan. Since we will no longer be receiving any substantial revenues from LifeScan beyond the 2018 financial year, the LifeScan contract is deemed to be completed hence ASC 606 is not applied to revenues from LifeScan. The Company notes that there was an underpayment of quarterly services fees of A$164,577 relating to prior years, the sum of which has been accrued recorded and receipted in the 2019 financial year. In relation to revenues from LifeScan, we recognized revenues from all sources based on the provisions of the U.S. SECs Staff Accounting Bulletin No. 104 and ASC 605 Revenue Recognition. The Companys LifeScan revenue represented provision of services. Revenue from services is recognized when a persuasive evidence of an arrangement exists, services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. B. Nature of goods and services The following is a description of products and services from which the Company generates its revenue. Products and services Nature, timing of satisfaction of performance obligations, and significant payment terms Point-of-care coagulation test devices The Company recognizes revenue from sales of products at the time title of goods passes to the customer and the customer assumes the risks and rewards of ownership. The performance obligation is satisfied at a point in time when the products are shipped to the customer. The customer generally pays the Company within 60 days from receipt of invoice. The transaction price is fixed. Coagulation testing services These are services performed by HRL. Revenue is recognized when the testing services undertaken on behalf of the customer have been completed by HRL. The performance obligation is satisfied at a point in time when the tests are completed and the results are forwarded to the customer. The customer pays HRL generally within 30 days from receipt of invoice. The transaction price is fixed. Quarterly service fees Quarterly service fees are based on the number of strips sold by LifeScan which falls within a valid claim of certain LifeScan patents. It is payable to us as an ongoing reward for our services and efforts to enhance the product. Revenue from quarterly services fees is recognized as revenue from services when the four basic criteria for revenue recognition are met. Quarterly service fees are billed on a quarterly basis and paid within 45 days of receipt of invoice. The transaction price is fixed. As further discussed herein, during the 2018 financial year, LifeScan effected the LifeScan Conversion. As a result of this, beyond the 2018 financial year, the Company has no longer and will no longer receive any quarterly service fees from LifeScan. The Company notes that there was an underpayment of quarterly services fees of A$164,577 relating to prior years, the sum of which was accrued and receipted during the current 2019 financial year. C. Disaggregation of revenue In the following table, revenue is disaggregated by major product and service line, and timing of revenue recognition. Year Ended December 31, 2019 2018 A$ A$ Major product/service lines Xprecia Stride TM strips 4,863,347 1,672,321 Lump sum service fees 0 44,635,704 Quarterly service fees 164,577 21,378,404 Coagulation testing services 1,094,669 1,193,948 Other services 774,606 576,537 6,897,199 69,456,914 Timing of revenue recognition Products and services transferred at a point in time 6,897,199 69,456,914 Services transferred over time 0 0 6,897,199 69,456,914 D. Contract balances The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers. Year Ended December 31, 2019 2018 A$ A$ Receivables 116,626 50,209,561 Contract assets 0 0 Contract liabilities: - Current 2,682,404 2,356,583 - Non-current 1,421,680 3,463,737 Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable represents amounts invoiced and revenue recognized prior to invoicing when we have satisfied our performance obligation and have the unconditional right to payment. A contract asset is an entitys right to payment for goods and services already transferred to a customer but that right to payment is conditional on something other than the passage of time. The contract assets are transferred to the receivables when the rights become unconditional. The contract liabilities primarily relates to the following:  2019 financial year  the Companys obligation to transfer Xprecia Stride  strips to Siemens for which the Company has received consideration from Siemens but the transfer has not yet been completed.  2018 financial year - advance consideration received from Siemens for contract research and development, for which transfer of control occurs, and therefore revenue is recognized when the deliverables are met. Significant changes in the contract assets and the contract liabilities balances during the period are as follows: Contract Asset Contract Liability (Current) Contract Liability (Long-Term) A$ A$ A$ Opening balance (January 1, 2019) 0 2,356,583 3,463,737 Closing balance (December 31, 2019) 0 2,686,404 1,421,680 Increase/(decrease) 0 329,821 (2,042,057 ) Opening balance (January 1, 2018) 0 2,356,583 3,463,737 Closing balance (December 31, 2018) 0 2,356,583 3,463,737 Increase/(decrease) 0 0 0 The movement in contract liabilities is explained as follows:  Of the current portion of the total contract liabilities balance as at December 31, 2018, a sum of A$ 658,675 was recognized as revenue in January 2019 as the Company met one of its milestones pursuant to the Siemens Collaboration Agreement. The remainder of the milestones consideration previously received but deferred was repaid in September 2019 when the Siemens Collaboration Agreement was terminated.  There was a prepayment of US$ 4,000,000 towards future strip sales by Siemens on November 1, 2019. The balance of the Siemens prepayment account as at December 31, 2019 is US$ 2,833,870 (A$4,104,084), reducing by US$ 1,166,130 during Q4 2019 as the Company supplied strips to Siemens. E. Transaction price allocated to the remaining performance obligations There was a prepayment of US$4,000,000 towards future strip sales by Siemens on November 1, 2019. US$1,166,130 has been recognized as revenue during Q4 2019 as the Company supplied strips to Siemens. The balance of the Siemens prepayment account as at December 31, 2019 is US$2,833,870 (A$4,104,084).