Experian 2014 Annual Report Download - page 119

Financial statements • Notes to the Group financial statements 115
Revenue in respect of the provision and processing of data is recognised in the year in which the service is provided. Subscription
revenues, and revenues in respect of services to be provided by an indeterminate number of acts over a specified period of time,
are recognised on a straight-line basis over those periods. Customisation, development and consulting revenues are recognised
by reference to the stage of completion of the work which is generally on the basis of costs incurred to date as a percentage of
estimated total costs. Revenue from software licences is recognised upon delivery. Revenue from maintenance agreements is
recognised on a straight-line basis over the term of the maintenance period.
Where a single arrangement comprises a number of individual elements which are capable of operating independently of one another,
the total revenues are allocated amongst the individual elements based on an estimate of the fair value of each element. Where the
elements are not capable of operating independently, or reasonable measures of fair value for each element are not available, total
revenues are recognised on a straight-line basis over the contract period to reflect the timing of services performed.
Sales are generally invoiced in the geographic area in which the customer is located and accordingly the geographic location
of the invoicing company is used as the basis for attributing revenue to individual countries.
(q) Operating charges
Operating charges are reported by nature in the Group income statement, reflecting the Group’s cost-management control
structure.
Details of charges in respect of share incentive plans within labour costs are set out in note (t) below. Those for post-employment
benefits are set out in note (n) above.
Details of the Group’s amortisation and depreciation policy are given in notes (f) and (g) above. The principles upon which
impairment charges are recognised are set out in note (d) above.
Payments made under operating leases are charged in the Group income statement on a straight-line basis over the lease period.
Incentives from lessors are recognised as a systematic reduction of the charge over the lease period.
(r) Net finance costs (note 15)
Incremental transaction costs which are directly attributable to the issue of debt are capitalised and amortised over the expected
life of the borrowing using the effective interest rate method. All other borrowing costs are charged in the Group income statement
in the year in which they are incurred.
Amounts payable or receivable in respect of interest rate swaps are taken to net finance costs over the periods of the contracts,
together with the interest differentials reflected in foreign exchange contracts.
Details of the nature of movements in the fair value of derivatives which are reported as financing fair value remeasurements are
included in note (k) above. The change in the year in the net present value of put/call option agreements in place, in respect of
shares held by non-controlling shareholders, is recognised as a financial fair value remeasurement within net finance costs.
(s) Tax (note 16)
The tax charge or credit for the year is recognised in the Group income statement, except for tax on items recognised in other
comprehensive income or directly in equity. In such cases the tax is recognised in other comprehensive income or directly in
equity as appropriate.
Current income tax is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the
countries where the Group operates.
Deferred tax is provided in full on temporary differences arising between the tax bases of assets and liabilities and their carrying
amounts in the Group financial statements. Deferred tax is not recognised on taxable temporary differences arising on the initial
recognition of goodwill. Deferred tax that arises from the initial recognition of an asset or liability in a transaction, other than a
business combination, that at the time of the transaction affects neither accounting nor taxable profit or loss, is not accounted for.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply when the asset is realised or the liability
settled, based on the tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries
where the Group operates.
Deferred tax assets are recognised in respect of tax losses carried forward and other temporary differences, to the extent that the
realisation of the related tax benet through future taxable prots is probable. Deferred tax is provided on temporary differences
arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is
controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets
and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where they relate to
the same tax authority.