Singapore Airlines 2016 Annual Report Download - page 132

Notes to the Financial Statements
31 March 2016
2 Summary of Significant Accounting Policies (continued)
(z) Taxation (continued)
(iii) Indirect taxes
Revenues, expenses and assets are recognised net of the amount of indirect tax except that:
• Theindirecttaxincurredonapurchaseofassetsorservicesisnotrecoverablefromthetaxauthority,theindirecttaxis
recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
• Receivablesandpayablesarestatedwiththeamountofindirecttaxincluded.
The net amount of indirect tax recoverable from, or payable to, the tax authority is included as part of receivables or payables in
the statement of financial position.
(aa) 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, net of discounts and rebates.
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
airway bills is included in current liabilities as sales in advance of carriage. The value of tickets and airway bills is recognised as revenue
if unused aer two years and one year respectively.
Revenue from repair and maintenance of aircra, and 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 the lease of aircra is recognised on a straight-line basis over the lease term.
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 deferred until they are utilised.
The deferment of the revenue is estimated based on historical trends of breakage upon redemption, which is then used to project the
expected utilisation of these benefits.
In addition, the Company also sells miles to programme partners for issuance to their programme members. For miles purchased by
programme partners, revenue is deferred until awards are utilised. The deferrals are based on the expected utilisation of these awards.
(ab) 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 eective interest method.
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