Shaw 2013 Annual Report Download - page 28

Shaw Communications Inc
.
MANA
G
EMENT’
S
DI
SC
U
SS
I
O
N AND ANALY
S
I
S
Au
g
ust 31, 2013
customer (e.g., hospitals, hotels or retail franchises) that is receiving at a minimum, basic cable
service, is counted as one subscriber. Internet customers include all modems on billing an
d
Digi
tal Phone l
i
nes
i
ncludes all
p
hone l
i
nes on b
i
ll
i
n
g
. All subscr
i
ber counts exclud
e
complimentary accounts but include promotional accounts
.
S
h
a
wD
i
r
ect
m
easu
r
es its cou
n
t of subsc
r
ibe
r
si
n
t
h
esa
m
e
m
a
nn
e
r
as Cab
l
e cou
n
ts its
V
ideo
customers, except that it also includes seasonal customers who have indicated their intention t
o
reconnect within 180 da
y
s of disconnection.
R
evenue generating units (“RGUs”) represent the number of products sold to customers and
i
ncludes V
i
deo
(C
able and DTH subscr
i
bers
)
, Internet customers, and D
igi
tal Phone l
i
nes. As a
t
August
31
,
2013
the
C
ompany had approx
i
mately
6
.
2
m
i
ll
i
on R
G
Us
.
S
ubscr
i
ber, or R
G
U, counts and
p
enetrat
i
on stat
i
st
i
cs measure market share and also
i
nd
i
cate
t
he success of bundling and pricing strategies.
C
ommenc
i
n
gi
n
2013
the
C
om
p
an
y
no lon
g
er
i
ncludes
p
end
i
n
gi
nstallat
i
ons
i
n the subscr
i
ber
counts for Internet and Digital Phone. Comparative balances and subscriber growth have been
restated. Also,
g
iven the
g
rowth in and
p
enetration of Di
g
ital customers, the Com
p
an
y
has no
w
comb
i
ned the re
p
ort
i
n
g
o
f
Bas
i
c cable and D
igi
tal as a V
i
deo subscr
i
ber
.
F. Critical accountin
gp
olicies and estimates
The
C
om
p
an
yp
re
p
ared
i
ts
C
onsol
i
dated F
i
nanc
i
al
S
tatements
i
n accordance w
i
th IFR
S
a
s
issued by the International Accounting Standards Board (“IASB”). An understanding of the
Com
p
an
y
’s accountin
gp
olicies is necessar
y
for a com
p
lete anal
y
sis of results, financial
p
os
i
t
i
on, l
iq
u
i
d
i
t
y
and trends. Re
f
er to Note
2
to the
C
onsol
i
dated F
i
nanc
i
al
S
tatements
f
or
additional information on accounting policies. The following section discusses key estimate
s
and assum
p
tions that mana
g
ement has made under IFRS and how the
y
affect the amounts
re
p
orted
i
n the
C
onsol
i
dated F
i
nanc
i
al
S
tatements and notes. Follow
i
n
gi
sad
i
scuss
i
on o
f
the
Company’s critical accounting policies:
i) Revenue and expense recognitio
n
R
evenue
i
s cons
i
dered earned as serv
i
ces are
p
er
f
ormed,
p
rov
i
ded that at the t
i
me o
f
performance, ultimate collection is reasonably assured. Such performance is regarded as havin
g
been achieved when reasonable assurance exists regarding the measurement of the
cons
i
derat
i
on that w
i
ll be der
i
ved
f
rom render
i
n
g
the serv
i
ce. Revenue
f
rom cable, Internet
,
D
igital Phone and DTH customers includes subscriber service revenue when earned. The
revenue is considered earned as the period of service relating to the customer billing elapses
.
The Company has multiple deliverable arrangements comprised of upfront fees (subscriber
connection fee revenue and/or customer
p
remise e
q
ui
p
ment revenue) and related subscri
p
tion
revenue. The
C
om
p
an
y
determ
i
ned that the u
pf
ront
f
ees char
g
ed to customers do not const
i
tut
e
separate units of accounting; therefore, these revenue streams are assessed as an integrate
d
p
ac
k
a
g
e
.
W
ith Shaw Media, subscriber revenue is recognized monthly based on subscriber levels
.
Advert
i
s
i
n
g
revenues are reco
g
n
i
zed
i
n the
p
er
i
od
i
nwh
i
ch the advert
i
sements are a
i
red o
r
di
splayed on the
C
ompanys’ d
i
g
i
tal propert
i
es and recorded net o
f
agency comm
i
ss
i
ons as these
amounts are paid directly to the agency or advertiser. When a sales arrangement includes
m
ult
ip
le advert
i
s
i
n
g
s
p
ots, the
p
roceeds are allocated to
i
nd
i
v
i
dual advert
i
s
i
n
g
s
p
ots under the
arrangement based on relat
i
ve
f
a
i
r values
.
2
4