Tiscali 2009 Annual Report Download - page 97

Tiscali Group: Annual Report 2009
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Remuneration schemes involving interests in the share capital
The Group gives additional benefits to certain members of the top management and certain employees
mainly consisting of stock option plans. These plans are a component of the beneficiaries’ remuneration.
The cost is the fair value of the stock options as of the date allocation is recorded, for accounting purposes
in accordance with “IFRS 2- Payments based on shares”, in the income statement with a matching balance
directly under shareholders’ equity.
Provisions for risks and charges
Provisions for risks and charges relating to potential legal and tax liabilities are established following
estimates performed by directors on the basis of judgements developed by the Group legal and tax advisors,
concerning the charges that are reasonably deemed to be incurred in order to settle the obligation. If in
relation to the final result of such judgements the Group is called upon to fulfil an obligation for a sum other
than that estimated, the related effects are reflected in the income statement.
Treasury shares
Treasury shares are booked to reduce the shareholders’ equity.
Revenue recognition
Revenues are stated to the extent that it is probable that the Group will receive the economic benefits and
their amount can be determined reliably. They are stated net of discounts, rebates and returns.
Revenues for the provision of services are stated in the income statement with reference to the stage of
completion of the service and only when the result of the service can be reliably estimated.
In particular, recognition in the income statement for revenues from internet access services (narrowband
and broadband) and voice services, is based on the actual traffic produced at the reference date and/or the
periodic service fee payable at that date.
As described above, revenues related to the activation of broadband services (ADSL), consistent with the
relevant costs capitalised among intangible assets, are booked to the income statement on a straight-line
basis in relation to the minimum legal duration of customer contracts, which, starting from the second
quarter of 2009, is normally 24 months. Amounts relating to other financial periods are recorded under
other current liabilities as deferred income.
Lastly, the revenues originating from the sale of IRU (Indefeasible Rights of Use) are acknowledged per
quota, depending on the duration of the concession, while any components which may be identified
separately are recorded in the revenues based on the nature of the performance or disposal.