Experian 2011 Annual Report Download - page 105

Financial statements 103
5. Signicant accounting policies (continued)
(p) Provisions
Provisions are recognised when:
- The Group has a present legal or constructive obligation as a result of past events; and
- It is more likely than not that an outow of resources will be required to settle the obligation; and
- The amount has been reliably estimated.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash ows at a pre-tax rate that
reects current market assessments of the time value of money and, where appropriate, the risks specic to the liability. Where discounting is
used, the increase in the provision due to the passage of time is recognised as an interest expense.
(q) Non-controlling interests
The non-controlling interests in the Group balance sheet represent the share of net assets of subsidiary undertakings held outside the Group.
The movement in the year comprises the prot attributable to such interests together with any dividends paid, movements in respect of
corporate transactions and related exchange differences.
Where put/call option agreements are in place in respect of shares held by the non-controlling shareholders, the put element of the liability is
measured in accordance with the requirements of IAS 32 and is stated at the net present value of the expected future payments. Such liabilities
are shown as current or non-current nancial liabilities in the Group balance sheet. The change in the net present value of such options in the
year is recognised in the Group income statement within net nance costs.
(r) Revenue recognition
Revenue represents the fair value of consideration receivable on the sale of goods and services to external customers, net of value added tax
and other sales taxes, rebates and discounts, including the provision and processing of data, subscriptions to services, software and database
customisation and development and the sale of software licences, maintenance and related consulting services.
Revenue in respect of the provision and processing of data is recognised in the year in which the service is provided. Subscription revenues, and
revenues in respect of services to be provided by an indeterminate number of acts over a specied period of time, are recognised on a straight
line basis over those periods. Customisation, development and consulting revenues are recognised by reference to the stage of completion of
the work generally on the basis of costs incurred to date as a percentage of estimated total costs. Revenue from software licences is recognised
upon delivery. Revenue from maintenance agreements is recognised on a straight line basis over the term of the maintenance period.
Where a single arrangement comprises a number of individual elements which are capable of operating independently of one another, the total
revenues are allocated amongst the individual elements based on an estimate of the fair value of each element. Where the elements are not
capable of operating independently, or reasonable measures of fair value for each element are not available, total revenues are recognised on a
straight line basis over the contract period to reect the timing of services performed.
Sales are generally invoiced in the geographic area in which the customer is located and accordingly the geographic location of the invoicing
undertaking is used as the basis for attributing revenue to individual countries.
(s) Employee benets
Pension and other post employment benets
Dened benet pension arrangements – funded plans
The retirement benet assets and obligations recognised in the Group balance sheet in respect of funded plans comprise the fair value of plan
assets of funded plans less the present value of the related dened benet obligation at the balance sheet date, together with adjustments
for past service costs. The dened benet obligation is calculated annually by independent qualied actuaries using the projected unit credit
method.
The present value of the dened benet obligation is determined by discounting the estimated future cash outows using market yields
available at the assessment date on high-quality corporate bonds that are denominated in the currency in which the benets will be paid, and
that have terms to maturity consistent with the estimated average term of the related pension liability.
Actuarial gains and losses arising from experience adjustments, and changes in actuarial assumptions, are recognised immediately in the
Group statement of comprehensive income.
Past service costs are recognised immediately in the Group income statement, unless the changes to the pension plan are conditional on the
employees remaining in service for a specied period of time. In this case, the past service costs are amortised on a straight line basis over that
period.
The pension cost recognised in the Group income statement comprises the cost of benets accrued plus interest on the dened benet
obligation less the expected return on the plan assets over the year. Service and nancing costs are recognised separately in the Group income
statement.
Dened benet pension arrangements – unfunded plans
Unfunded pension obligations are determined and accounted for in accordance with the principles used in respect of the funded arrangements.