Singapore Airlines 2002 Annual Report Download - page 70

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70
Notes to the Financial Statements
31 March 2002
SIA Annual Report 01/02
2 Accounting Policies (continued)
(q) Trade creditors
Trade creditors and amounts owing to subsidiary and associated companies are carried at cost.
(r) Forward contracts
Gains and losses arising from forward contracts on foreign currencies and jet fuel are recognized at dates of maturity.
(s) Revenue
Passenger and cargo sales are recognized as operating revenue when the transportation is provided. The value of unused tickets
and air waybills is included in current liabilities as sales in advance of carriage and written-back as revenue if unused after two
years.
Revenue from the provision of airport terminal services is recognized upon services rendered.
Revenue from engine overhaul, repair and maintenance of aircraft is recognized based on the percentage of completion of the
projects.
(t) Income from investments
Dividend income from investments is recognized when the shareholders’ right to receive the payment is established.
Interest income from investments and fixed deposits is recognized on an accrual basis.
(u) Frequent flyer programme
The Company operates a frequent flyer programme called “KrisFlyer” that provides travel awards to programme members based
on accumulated mileage. A portion of passenger revenue attributable to the award of frequent flyer benefits is estimated and
deferred until they are utilized. Such unutilized benefits are written-back upon expiry.
(v) Training and development costs
Training and development costs, including start-up programme costs, are charged to the profit and loss account in the financial
year in which they are incurred.
(w) Capitalized loan interest
Borrowing costs incurred to finance progress payments for aircraft and building projects are capitalized until the aircraft are
commissioned for operation or the projects are completed. All other borrowing costs are recognized as expenses in the period in
which they are incurred. $1.3 million (2000-01: $ nil) of the Company’s borrowing costs were capitalized during the year.