ENRICHING LIVES EXPANDING HORIZONS - Maxis

134
Financial Statements
NOTES TO THE
FINANCIAL STATEMENTS
31 December 2011
Continued
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(t) Employee benefits (continued)
(iii) Share-based compensation (continued)
The total amount to be expensed over the vesting period is determined by reference to the fair value of the option at
grant date and the number of share options to be vested by the vesting date. At each reporting date, the Group revises its
estimate of the number of options that are expected to vest by the vesting date. Any revision of this estimate is included
in the income statement and a corresponding adjustment to equity over the remaining vesting period.
The fair value of employee share options is measured using a modified Black Scholes model. Measurement inputs include
share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average
historical volatility adjusted for changes expected due to publicly available information), weighted average expected life
of the instruments (based on maturity of the options), expected dividends and the risk-free interest rate (based on data
from recognised financial information sources). Non-market vesting conditions attached to the transactions are not taken
into account in determining fair value.
When share options are exercised, the proceeds received from the exercise of the share options together with the
corresponding share options reserve, net of any directly attributable transactions costs are transferred to share capital
(nominal value) and share premium. If the share options expire or lapse, the corresponding share options reserve
attributable to the share options is transferred to retained earnings.
In the separate financial statements of the Company, the grant by the Company of options over its equity instruments
to the employees of subsidiary undertakings in the Group is treated as a capital contribution. The fair value of employee
services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase
to investment in subsidiary undertakings, with a corresponding credit to equity.
(u) Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary
course of the Group’s activities. Revenue is shown net of service tax, returns, rebates, discounts and after eliminating sales
within the Group.
The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic
benefits will flow to the entity and specific criteria have been met for each of the Group’s activities as described below. The
amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved.
The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction
and the specifics of each arrangement.
(i) Telecommunications revenue
Revenues of mobile postpaid services and fixed line services are recognised at the time of customer usage and when
services are rendered. Service discounts and incentives are accounted as a reduction of revenue when granted.
Unutilised amounts on certain mobile postpaid rate plans are deferred up to one month. Unutilised amounts exceeding
one month are recognised as breakage revenue.