Virgin Media 2009 Annual Report Download - page 109

VIRGIN MEDIA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 2—Significant Accounting Policies (Continued)
£112.2 million and £118.0 million as of December 31, 2009 and 2008, respectively, are included on the
consolidated balance sheets.
Restructuring Costs
We account for our restructuring costs, which comprise of lease and contract exit costs as well as
employee termination costs, in accordance with the Exit or Disposal Cost Obligations Topic of the
FASB ASC and recognize a liability for costs associated with restructuring activities when the liability is
incurred. In 2008, we initiated a restructuring program aimed at driving further improvements in our
operational performance and eliminating inefficiencies. Accruals in respect to exit activities within this
program are recognized at the date the liability is incurred.
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.
Fixed line 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 the Revenue Recognition
Topic of the FASB ASC, in relation to connection and activation fees for cable television, as well as
fixed line 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 revenues in respect of line rentals and rental of equipment provided to customers are
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. Equipment revenue is stated net of discounts earned through service usage.
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 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
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