Tiscali 2014 Annual Report Download - page 84

Annual financial report as at 31 December 2014
Date
File Name
Status
Page
-
Annual Report as at 31
December 2014
84
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.
The revenues related to the activation of broadband services (ADSL) are booked to the income
statement on a straight-line basis over 36 months. Amounts relating to other financial periods are
recorded under other current liabilities as deferred income.
Financial income and charges
Interest received and paid, including interest on bond issues, is recognised using the effective interest
rate method.
Research and advertising costs
Research and advertising costs are charged directly to the income statement in the period they are
incurred.
Taxes
Income taxes include all the taxation calculated on the taxable income of Group companies.
- The tax currently payable is based on taxable income for the year. Taxable income differs
from the result reported in the income statement because it excludes items of income or
expense that are taxable or deductible in other years and it also excludes items that are never
taxable or deductible. Liability for current tax is calculated using tax rates applicable at the
statement of financial position date.
- Deferred taxes are taxes which are expected to be paid or recovered on timing differences
between the book value of the statement of financial position assets and liabilities and the
corresponding value for tax purposes used to calculate the taxable amounts, as well as on
those items which, despite not being allocated in the statement of financial position, lead to
potential future tax credits, such as for example the losses for the year which can be used for
tax purposes in the future, and are calculated according to the statement of financial position
and liability method.