ENRICHING LIVES EXPANDING HORIZONS - Maxis

MAXIS BERHAD
ANNUAL REPORT 2011
135
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(u) Revenue recognition (continued)
(i) Telecommunications revenue (continued)
Revenue of mobile prepaid services comprises sales of starter packs and prepaid top-up tickets. Revenue from sales of
starter packs is recognised at the point of sale to third parties while the revenue from the preloaded talk time within the
pack is recognised when services are rendered. Revenue from sales of prepaid top-up tickets is recognised when services
are rendered. The credits on preloaded talk time within the starter packs and prepaid top-up tickets can be deferred up
to the point of customer churn, after which such amounts are recognised as revenue.
Unutilised credits of prepaid top-up tickets sold to customers and distributors and unutilised airtime on certain postpaid
rate plans which have been deferred as described above are recognised as deferred income.
Revenue for provision of network facilities, public switched services, internet services and internet application 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.
Revenue earned from carriers for international gateway services is recognised at the time the calls occur and when
services are rendered.
Revenue from the sale of device is recognised upon the transfer of significant risks and rewards of ownership of the
goods to the customer which generally coincides with delivery and acceptance of the goods sold.
Where the Group’s role in a transaction is that of a principal, revenue is recognised on a gross basis. This requires revenue
to comprise the gross value of the transaction billed to the customer, after trade discounts, with any related expenditure
charged as an operating cost. Where the Group’s role in a transaction is that of an agent, revenue is recognised on a net
basis and represents the margin earned.
(ii) Dividend income
Dividend income is recognised when the Group’s right to receive payment is established.
(iii) Interest income
Interest income is recognised on a time proportion basis, taking into account the principal outstanding and the effective
interest rate over the period to maturity, when it is determined that such income will accrue to the Group.
(v) Government grants
As a Universal Service Provider (“USP”), the Group is entitled to claim certain qualified expenses from the relevant authorities
in relation to USP projects. The claim qualifies as a government grant and is recognised at its fair value where there is
reasonable assurance that the grant will be received and the Group will comply with all the attached conditions.
Government grants relating to costs are deferred and recognised in the income statement over the financial period necessary
to match them with the costs they are intended to compensate.
Government grants relating to the purchase of assets are included as deferred income and are credited to the income
statement on a straight line basis over the expected useful lives of the related assets.