Airtel 2012 Annual Report Download - page 94

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BHARTI AIRTEL ANNUAL REPORT 2011-12
l. Revenue recognition and receivables
Mobile Services
Service revenue is recognised on completion of provision of services. Service revenue includes income on roaming
commission and an access charge recovered from other operators, and is net of discounts and waivers. Revenue, net of
discount, is recognised on transfer of all significant risks and rewards to the customer and when no significant uncertainty
exists regarding realisation of consideration.
Processing fees on recharge is being recognised over the estimated customer relationship period or voucher validity
period, as applicable.
Revenue from prepaid calling cards packs is recognised on the actual usage basis.
Telemedia Services
Service revenue is recognised on completion of provision of services. Revenue is recognised when no significant uncertainty
exists regarding realisation of consideration. Service Revenue includes access charges recovered from other operators,
and is net of discounts and waivers.
Airtel Business (Previously known as Enterprise Services)
Revenue, net of discount, from sale of goods is recognised on transfer of all significant risks and rewards to the customer
and when no significant uncertainty exists regarding realisation of consideration. Revenue on account of bandwidth
service is recognised on time proportion basis in accordance with the related contracts.
Service Revenue includes access charges recovered from other operators, revenues from installation and provision of
Internet and Satellite Services. Installation charges are recognised as revenue on satisfactory completion of installation
of hardware and service revenue is recognised from the date of satisfactory installation of equipment and software at the
customer site and provisioning of Internet and Satellite Services.
Activation Income
Activation revenue and related direct activation costs, not exceeding the activation revenue, are deferred and amortized
over the related estimated customer relationship period, as derived from the estimated customer churn period.
Investing and Other Activities
Income on account of interest and other activities are recognised on an accrual basis. Dividends are accounted for when
the right to receive the payment is established.
Provision for Doubtful Debts
The Company provides for amounts outstanding for more than 90 days in case of active subscribers, roaming receivables,
receivables for data services and for entire outstanding from deactivated customers net off security deposits or in specific
cases where the management is of the view that the amounts from certain customers are not recoverable.
For receivables due from the other operators on account of their National Long Distance (NLD) and International Long
Distance (ILD) traffic for voice and Interconnect Usage Charges (IUC), the Company provides for amounts outstanding for
more than 120 days from the date of billing, net of any amounts payable to the operators or in specific cases where
management is of the view that the amounts from these operators are not recoverable.
Accrued Billing Revenue
Accrued billing revenue represent revenue recognized in respect of Mobile, Broadband and Telephone, and Long Distance
services provided from the bill cycle date to the end of each month. These are billed in subsequent periods as per the terms
of the billing plans.