Qantas 2013 Annual Report Download - page 116

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Basis of Preparation
Underlying EBIT of the Qantas Group’s operating segments is prepared and presented on the basis that reects the revenue
earned and the expenses incurred by each operating segment.
All revenues earned and expenses incurred by Qantas Loyalty, Qantas Freight and Jetstar Group are reported directly by
these segments. For Qantas Airlines where revenues earned and expenses incurred are directly attributable to either Qantas
International or Qantas Domestic they have been reported as such. Where revenues earned and expenses incurred by Qantas
Airlines are not individually attributable to either Qantas International or Qantas Domestic, they are reported by these operating
segments using an appropriate allocation methodology.
The signicant accounting policies applied in implementing this basis of preparation are set out below. These accounting policies
have been consistently applied to all periods presented in the Consolidated Financial Report.
Segment Performance Measure Basis of Preparation
External segment revenue External segment revenue is reported by operating segments as follows:
»Net passenger revenue is reported by the operating segment which operated the relevant
ight or provided the relevant service. For Qantas Airlines, where a multi-sector ticket covering
international and domestic travel is sold, the revenue is reported by Qantas Domestic and
Qantas International on a pro-rata basis using an industry standard allocation process.
»Net freight revenue includes air cargo and express freight revenue and is reported by the
Qantas Freight operating segment.
»Frequent Flyer redemption revenue, marketing revenue, membership fees and other related
revenue is reported by the Qantas loyalty operating segment.
»Other revenue is reported by the operating segment that earned the revenue.
Inter-segment revenue Inter-segment revenue for Qantas Domestic, Qantas International and Jetstar Group operating
segments primarily represents:
»Net passenger revenue arising from the redemption of frequent yer points for Qantas Group
ights by Qantas Loyalty; and
»Net Freight revenue from the utilisation of Qantas Brands and Jetstar Group’s aircraft
bellyspace by Qantas Freight.
Inter-segment revenue for Qantas Loyalty primarily represents marketing revenue arising from
the issuance of frequent yer points to Qantas Domestic, Qantas International and Jetstar Group.
Intersegment revenue transactions, which are eliminated on consolidation, occur in the ordinary
course of business at prices that approximate market prices.
Qantas Loyalty does not derive net prot from intersegment transactions relating to frequent yer
point issuances and redemptions.
Share of net prot/(loss)
of associates and jointly
controlledentities
Share of net prot/(loss) of associates and jointly controlled entities is reported by the operating
segment which is accountable for the management of the investment. The share of net
prot/(loss) of associates and jointly controlled entities for Qantas Airlines investments has
been equally shared between Qantas Domestic and Qantas International.
Underlying EBITDAR The signicant expenses impacting Underlying EBITDAR are as follows:
»Manpower and staff related costs are reported by the operating segment that utilises the
manpower. Where manpower supports both Qantas Domestic and Qantas International,
costs are reported by Qantas Domestic and Qantas International using an appropriate
allocation methodology.
»Fuel expenditure is reported by the segment that consumes the fuel in its operations.
»Aircraft operating variable costs are reported by the segment that incurs these costs.
»All other expenditure is reported by the operating segment to which they are directly
attributable or in the case of Qantas Airlines between Qantas Domestic and Qantas
International using an appropriate allocation methodology. To apply this accounting policy,
where necessary expenditure is recharged between operating segments as a cost recovery.
Depreciation and amortisation Qantas Domestic, Qantas International and Jetstar Group report depreciation expense for
passenger aircraft owned by the Qantas Group and own by the segment.
Qantas Freight reports depreciation expense for freight aircraft owned by the Qantas Group.
Other depreciation and amortisation is reported by the segment that uses the related asset.
2. Underlying PBT and Operating Segments
continue
d
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2013