Qantas 2013 Annual Report Download - page 108

106
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2013
Ineffective and Non-designated Derivatives
From time to time certain derivative nancial instruments
do not qualify for hedge accounting notwithstanding that
the derivatives are held to hedge identied exposures. Any
changes in the fair value of a derivative instrument, or part of a
derivative instrument, that do not qualify for hedge accounting
are classied as “ineffective” and recognised immediately in the
Consolidated Income Statement.
Fair Value Calculations
The fair value of nancial instruments traded in active markets
is based on quoted market prices at balance date. The fair
value of nancial instruments that are not traded in an active
market are estimated using valuation techniques consistent
with accepted market practice. The Qantas Group uses a variety
of methods and input assumptions that are based on market
conditions existing at balance date.
Financial Guarantee Contracts
Financial guarantee contracts are recognised as a nancial
liability at the time the guarantee is issued. The liability is
initially measured at fair value and subsequently at the higher
of the amount determined in accordance with AASB 137
Provisions, Contingent Liabilities and Contingent Assets and
the amount initially recognised less cumulative amortisation,
where
appropriate.
The fair value of nancial guarantees is determined as the
present value of the difference in net cash ows between
the contractual payments under the debt instrument and the
payments that would be required without the guarantee, or
the estimated amount that would be payable to a third party
for assuming the obligations.
Where guarantees in relation to loans or payables of associates
and jointly controlled entities are provided for no compensation,
the fair values are accounted for as contributions and
recognised as part of the cost of the investment.
G REVENUE RECOGNITION
Passenger and Freight Revenue
Passenger and freight revenue is measured at the fair value of
the consideration received, net of sales discount, passenger
and freight interline/IATA commission and Goods and Services
Tax. Other sales commissions paid by the Qantas Group are
included in expenditure. Tours and travel revenue is measured
at the net amount of commission retained by the Qantas Group.
Passenger revenue and freight revenue is recognised
when passengers or freight are uplifted. Unused tickets are
recognised as revenue using estimates based on the terms
andconditions of the ticket, historic trends and experience.
Passenger recoveries (including fuel surcharge on passenger
tickets) are included in net passenger revenue. Freight fuel
surcharge is included in net freight revenue.
Revenue from ancillary passenger revenue, passenger services
fees, lease capacity revenue and air charter revenue is
recognised as revenue when the services are provided.
Frequent Flyer Revenue
Redemption Revenue
Revenue received for the issuance of points is deferred as
a liability (revenue received in advance) until the points are
redeemed or the passenger is uplifted, in the case of Qantas
Group ight redemptions.
Redemption revenue is measured based on management’s
estimate of the fair value of the expected awards for which the
points will be redeemed. The fair value of the awards is reduced
to take into account the proportion of points that are expected
to expire (breakage).
Marketing Revenue
Marketing revenue associated with the issuance of points is
recognised when the service is performed (typically on the
issuance of the point).
Marketing revenue is measured as the difference
between the cash received on issuance of a point and the
redemptionrevenue.
Membership Fee Revenue
Membership fee revenue results from the initial joining fee
charged to members. Revenue is recognised on expiry of any
refund period.
Contract Work Revenue
Contract work revenue results from the rendering of services
associated with contracts.
Where services performed are in accordance with contractually
agreed terms over a short period and are task specic, revenue
is recognised when the services have been performed or when
the resulting ownership of the goods passes to the customer.
Revenue on long-term contracts to provide goods or services
is recognised in proportion to the stage of completion of the
contract when the stage of contract completion can be reliably
measured or otherwise on completion of the contract.
Other Revenue/Income
Income resulting from claims for liquidated damages is
recognised as other income when all performance obligations
are met, including when a contractual entitlement exists, when
it can be reliably measured and when it is probable that the
economic benets will accrue to the Qantas Group.
Revenue from Qantas Club membership fees, freight terminal
fees, retail/advertising and other property revenue and other
miscellaneous income is recognised as other revenue/income
at the time service is provided.
Tours and travel revenue is recognised when tours and travel
air tickets and land content are utilised.
Asset Disposals
Gains or losses on the disposal of assets are recognised at the
date the signicant risks and rewards of ownership of the asset
passes to the buyer, usually when the purchaser takes delivery
of the asset. The gain or loss is determined by comparing the
proceeds on disposal with the carrying amount of the asset.
1. Statement of Signicant Accounting Policies
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ontinue
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