Tiscali 2003 Annual Report Download - page 106

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108108
i) Receivables
Receivables are listed at their estimated realisable value. This value is obtained by direct write-down of receivables. Receivables
also include amounts pertaining to invoices still to be issued for services rendered during the year.
k) Accruals and deferrals
Accruals and deferrals include only the proportion of earnings and charges pertaining to the financial year that will be booked in
subsequent financial years, and the proportion of revenues and expenses booked or incurred before the end of the financial year
but pertaining to the subsequent financial years. At no time shall this account include portions of revenues and expenses spread
over two or more financial years, the amount of which varies over time.
l) Reserves for risks and charges
Risk funds are allocated and shown as liabilities on the balance sheet, for the purpose of covering potential Company liabilities that
are certain or very likely to be incurred, for which the relevant amounts and dates are not known at the end of the financial year.
m) Income tax
The Company incurred no tax liabilities during the year, since it generated no taxable income. As a precaution, tax benefits car-
ried forward in respect of losses from previous years are not included in the accounts.
n) Staff severance indemnity reserve
This provision corresponds to all amounts due to employees under current laws.
o) Payables
Payables are recorded at nominal value.
p) Risks, commitments and guarantees
Commitments and guarantees are shown in the memorandum accounts at their contractual value.
The guarantees take the form of surety bonds issued in favour of third parties in execution of contractual obligations.
Commitments refer to obligations resulting from agreements that have been signed but which have yet to be performed, and from
rental and operating lease charges to be posted in future financial years.
The risks deemed most likely to generate a liability are described in the notes, and an allocation to the reserve for risk is made as
appropriate. Those risks deemed to represent only a possible liability are also described in the notes, but no allocation is made to
a specific risk fund, in line with standard accounting criteria. Remote risks are not taken into consideration.
q) Recording of revenues, income, costs and charges
Revenues and income, and costs and charges are recorded in the accounts net of returns, discounts, rebates and bonuses. In particular:
Voice and dial-up revenues are booked based on the amount of actual traffic recorded at the end of the financial year.
Activation revenues and costs (installation and modems/equipment) for broadband services (ADSL) are charged to the profit and loss
account in line with the expected duration of the customer’s account with the Company, estimated at 36 months years based on Company
data and recent trends. Amounts relating to other financial years are recorded under deferred income (income) or deferred charges (costs).
Business services revenues are recorded in relation to the period in which they are earned.
Financial income is posted on the basis of pro-tempore accounting principles.