Singapore Airlines 2006 Annual Report Download - page 78

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76
Singapore Airlines Annual Report 05/06
2 Accounting Policies (continued)
(c) Signifi cant accounting estimates (continued)
(iii) Passenger revenue recognition
Passenger sales are recognised as operating revenue when the transportation is provided. The value of unused tickets is
included as sales in advance of carriage in the balance sheet and recognised in revenue at the end of two years. This is
estimated based on historical trends and experiences of the Company whereby ticket uplift occurs mainly within the fi rst
two years.
(iv)
Frequent fl yer programme
The Company operates a frequent fl yer 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 fl yer
benefi ts is deferred until they are utilised. The deferment of the revenue is estimated based on historical trends of
breakage and redemption, which is then used to project the expected utilisation of these benefi ts. Any remaining
unutilised benefi ts are recognised as revenue upon expiry.
(d) Consolidation
The consolidated fi nancial statements comprise the separate fi nancial statements of the Company and its subsidiaries as at
the balance sheet date. Consistent accounting policies are applied for like transactions and events in similar circumstances. A
list of the Group’s subsidiary companies is shown in Note 20 to the fi nancial statements.
All intra-group balances, transactions, income and expenses and profi ts and losses resulting from intra-group transactions
that are recognised in assets, are eliminated in full.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and
continue to be consolidated until the date that such control ceases.
Acquisitions of subsidiaries are accounted for using the purchase method. The cost of an acquisition is measured as the
fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus
costs directly attributable to the acquisition. Identifi able assets acquired and liabilities and contingent liabilities assumed in
a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any
minority interest.
Any excess of the cost of the business combination over the Group’s interest in the net fair value of the identifi able assets,
liabilities and contingent liabilities represents goodwill. The goodwill is accounted for in accordance with the accounting
policy for goodwill stated in Note 2 (f)(i) below.
Any excess of the Group’s interest in the net fair value of the identifi able assets, liabilities and contingent liabilities over the
cost of business combination is recognised in the profi t and loss account on the date of acquisition.
Minority interests represent the portion of profi t or loss and net assets in subsidiaries not held by the Group. They are
presented in the consolidated balance sheet within equity, separately from the parent shareholders’ equity, and are separately
disclosed in the consolidated profi t and loss account.
NOTES TO THE FINANCIAL STATEMENTS
31 March 2006