Virgin Media 2006 Annual Report Download - page 153

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. Significant Accounting Policies (Continued)
In 2006, we initiated a number of restructuring programs as part of our acquisitions of Telewest and Virgin Mobile. Provisions in
respect to exit activities of the acquired businesses are recognized under EITF 95−3, Recognition of Liabilities in Connection with a
Purchase Business Combination and included on the acquired company’s opening balance sheet. Provisions in respect to exit activities
of the historic NTL business are recognized under FAS 146.
Revenue Recognition
We recognize revenue only when it is realized or realizable and earned. We recognize revenue when all of the following are
present:
• persuasive evidence of an arrangement exists between us and our customers;
• delivery has occurred or the services have been rendered;
• the price for the service is fixed or determinable; and
• collectibility is reasonably assured.
Telephone, cable television and internet revenues are recognized as the services are provided to customers. At the end of each
period, adjustments are recorded to defer revenue relating to services billed in advance and to accrue for earned but unbilled services.
Installation revenues are recognized in accordance with the provisions of FASB Statement No. 51, Financial Reporting by Cable
Television Companies, in relation to connection and activation fees for cable television, as well as telephone and internet services, on
the basis that we market and maintain a unified fiber network through which we provide all of these services. Installation revenues are
recognized at the time the installation has been completed to the extent that those fees are less than direct selling costs. Installation
fees in excess of direct selling costs are deferred and amortized over the expected life of the customer’s connection.
Rental revenue in respect of line rentals and rental of equipment provided to customers is recognized on a straight−line basis over
the term of the rental agreement.
Mobile handset and other equipment revenues are recognized when the goods have been delivered and title has passed.
Mobile service revenues include airtime, data, roaming and long−distance revenues and are invoiced and recorded as part of a
periodic billing cycle. Service revenues are recognized as the services are provided. At the end of each period, adjustments are
recorded to defer revenue relating to services billed in advance and to accrue for earned but unbilled services.
Contract and non−contract post−pay customers are billed in arrears based on usage and revenue is recognized when the service is
rendered and collectibility is reasonably assured. Revenue from non−contract pre−pay customers is recorded as deferred revenue prior
to commencement of services and is recognized as the services are rendered or usage expires.
F−74
Source: VIRGIN MEDIA INVESTM, 10−K, March 01, 2007