Telstra 2016 Annual Report Download - page 90

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Notes to the financial statements (continued)
Section 2. Our performance (continued)
88 | Telstra Corporation Limited and controlled entities
2.2 Income (continued)
2.2.1 Recognition and measurement
Revenue represents the fair value of the consideration received or
receivable. Revenue is recorded net of sales returns, trade
allowances, discounts, sales incentives, duties and taxes. We
generate revenue and other income primarily from the following
business activities:
Category Recognition and measurement
Sale of services Telecommunication services
Revenue from:
• calls is earned on completion of the call
• internet and data is earned on a straight-line basis over the period of service provided, unless another
method better represents the stage of completion.
Installation and connection fees that are not considered to be separate services are deferred and
recognised over the average estimated customer life.
Rent of network facilities
We earn rent mainly from access to retail and wholesale fixed and mobile networks and from the rent of
dedicated lines, customer equipment, property, plant and equipment and other facilities. The revenue
from providing access to the network is recorded on an accrual basis over the rental period.
Advertising and subscription service
Revenue from online advertising services is recognised when displayed or over the stated display period
for advertisements published on the websites or when the services have been rendered for promotional
activities. Subscription revenue is recognised on a straight-line basis over the subscription period.
Sale of goods Our revenue from the sale of goods includes revenue from the sale of customer equipment and other
goods. This revenue is recorded on delivery of the goods sold.
Construction contracts We record construction revenue and profit on a percentage of contract completion basis. The percentage
of completion is calculated based on estimated costs to complete the contract. This does not apply to
short duration contracts (less than one month) where revenue is only recorded upon contract completion.
Profits are recognised when:
• the stage of contract completion can be reliably determined
• costs to date can be clearly identified
• total contract revenues to be received and costs to complete can be reliably estimated.
Government grants Government grants are recognised where there is reasonable assurance that the grant will be received
and Telstra will comply with all attached conditions.
Government grants relating to costs are deferred and recognised in the income statement over the period
necessary to match them with the costs that they are intended to compensate.
Interest income We record interest income on an accrual basis. For financial assets, interest income is determined by the
effective yield on the instrument.