Singapore Airlines 2014 Annual Report Download - page 127

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ANNUAL REPORT FY2013/14
2 Summary of Significant Accounting Policies (continued)
(ab) Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.
Revenue is principally earned from the carriage of passengers, cargo and mail, engineering services, training of pilots,
air charters and tour wholesaling and related activities. Revenue for the Group excludes dividends from subsidiary
companies and intra-group transactions.
Passenger and cargo sales are recognised 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. The value of tickets and
air waybills is recognised as revenue if unused after two years and one year respectively.
Revenue from repair and maintenance of aircraft, engine and component overhaul is recognised based on the
percentage of completion of the projects. The percentage of completion of the projects is determined based on the
number of man-hours incurred to date against the estimated man-hours needed to complete the projects.
Rental income from lease of aircraft is recognised on a straight-line basis over the lease term.
(ac) Income from investments
Dividend income from investments is recognised when the Group’s right to receive the payment is established.
Interest income from investments and fixed deposits is recognised using the effective interest method.
(ad) Employee benefits
(i) Equity compensation plans
Employees of the Group receive remuneration in the form of share options and share awards as consideration for
services rendered.
The Group has in place, the Singapore Airlines Limited Employee Share Option Plan and the SIA Engineering
Company Limited Employee Share Option Plan for granting of share options to senior executives and all other
employees. The exercise price approximates the market value of the shares at the date of grant.
The Group has also implemented the Singapore Airlines Limited Restricted Share Plan and Performance Share
Plan and the SIA Engineering Company Limited Restricted Share Plan and Performance Share Plan for awarding
of fully paid ordinary shares to senior executives and key Senior Management, when and after pre-determined
performance or service conditions are accomplished.
Details of the plans are disclosed in Note 5 to the financial statements.
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the
options or awards at the date on which the share options or awards are granted. In valuing the share options and
share awards, no account is taken of any performance conditions, other than conditions linked to the price of the
shares of the Company and non-vesting conditions.