Singapore Airlines 2005 Annual Report Download - page 77

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SIA Annual Report 04/05 75
Notes to the Financial Statements
31 March 2005
CC
฀MOD: CN1323
M Y
C K
While every effort has been taken to carry out instruction to customers satisfaction
NO RESPONSIBILITY liablilty will be accepted for errors
CUSTOMERS ARE THEREFOREURGED TO CHECK THOROUGHLY BEFORE
AUTHORISING PRINTRUNS
DALIM
1 2 3 4 5 6 7 8 9 10 OK TS
CC196777 DLMAC13 10.06.2005 150#
1
3col
2 Accounting Policies (continued)
(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, estimated based on expected utilisation of these benefits, is deferred until they are utilised. These
are included under “deferred revenue” on the balance sheet. Any remaining unutilised benefits are recognised as
revenue upon expiry.
(v) Training and development costs
Training and development costs, including start-up program costs, are charged to the profit and loss account in the
financial year in which they are incurred.
(w) Capitalised loan interest
Borrowing costs incurred to finance progress payments for aircraft and building projects are capitalised until the
aircraft are commissioned for operation or the projects are completed. All other borrowing costs are recognised
as expenses in the period in which they are incurred. No (2003-04: $0.1 million) borrowing costs were capitalised
during the year by the Group.
(x) Impairment of assets
The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether there is
any indication of impairment. An impairment loss is recognised whenever the carrying amount of an asset exceeds
its recoverable amount. The impairment loss is charged to the profit and loss account unless it reverses a previous
revaluation credited to equity, in which case it is charged to equity. An impairment loss is reversed if there has been
a change in estimates used to determine the recoverable amount.
(y) Segmental reporting
Business Segment
The Group’s businesses are organised and managed separately according to the nature of the services provided. The
significant business segments of the Group are airline operations, airport terminal services and engineering services.
Geographical segment
The analysis of revenue by area of original sale from airline operations is derived by allocating revenue to the area in
which the sale was made. Revenue from other operations, which consist principally of airport terminal services and
engineering services, is derived in Singapore and therefore, is not shown.
Assets, which consist principally of flight and ground equipment, support the entire worldwide transportation
system, are mainly located in Singapore. An analysis of assets and capital expenditure of the Group by geographical
distribution has therefore not been included.