Here - RTÃ
Here - RTÃ
Here - RTÃ
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RADIO TELEFÍS ÉIREANN<br />
Statement of Accounting Policies (continued)<br />
Liquid investments<br />
Liquid investments comprise short-term<br />
deposits and current asset investments<br />
which have a maturity date of greater than<br />
three months from the date of acquisition but<br />
less than twelve months from the balance<br />
sheet date. Given that the maturity of these<br />
investments falls outside the timeframe for<br />
classification as cash and cash equivalents<br />
under IAS 7 Cash Flow Statements, the<br />
related balances are treated as financial<br />
assets and are stated at fair value at each<br />
balance sheet date. Income on these assets is<br />
recognised on an effective interest rate basis.<br />
Cash and cash equivalents<br />
Cash and cash equivalents comprise<br />
cash balances held for the purposes of<br />
meeting short term cash commitments<br />
and investments which are either readily<br />
convertible to known amounts of cash at or<br />
close to their carrying values and are subject<br />
to an insignificant risk of changes in value.<br />
Where investments are classified as cash<br />
equivalents, the related balances have a<br />
maturity of three months or less from the<br />
date of acquisition. Income on these assets is<br />
recognised on an effective interest rate basis.<br />
Trade and other payables<br />
Trade and other payables are stated at cost,<br />
which approximates to fair value given the<br />
short-dated nature of these assets.<br />
(b) Derivative financial instruments<br />
Derivative financial instruments are primarily<br />
used to manage the Group’s exposure to<br />
fluctuations in foreign currency exchange<br />
rates including US Dollar and Sterling.<br />
The Group does not enter into speculative<br />
derivative contracts.<br />
Derivative financial instruments are<br />
initially recognised at fair value and are<br />
subsequently re-measured to fair value at<br />
each balance sheet date. Changes in the<br />
fair value have been recognised immediately<br />
in the Income Statement as the Group<br />
has chosen not to hedge account for any<br />
derivatives in 2008 or 2007.<br />
9. Inventories<br />
(a) Programme inventories<br />
Programme inventories are valued at the<br />
lower of cost and net realisable value.<br />
Indigenous programme inventories are<br />
programmes produced in-house by RTÉ or<br />
programmes commissioned by RTÉ from<br />
independent producers. Costs for in-house<br />
programme stock include direct programme<br />
costs including production facilities<br />
and programme labour costs. Costs for<br />
commissioned programme stocks are based<br />
on the contract price. Indigenous programme<br />
inventories are charged to the Income<br />
Statement in full on first transmission.<br />
Acquired programme inventories are<br />
programmes and films purchased by RTÉ<br />
from third party studios and broadcasters.<br />
Costs for acquired programme inventories<br />
are defined as the third party licence<br />
contract price which RTÉ pays the studio<br />
or broadcaster. Acquired programme<br />
inventories are charged to the Income<br />
Statement based on the expected value of<br />
each transmission as follows:<br />
Features: 75% on first transmission, 25%<br />
on second transmission<br />
Series: 99% on first transmission, 1% on<br />
second transmission<br />
Sports rights inventories are the rights<br />
to broadcast sporting events. Costs for<br />
sport rights inventories are defined as the<br />
contract price agreed by the Group with the<br />
relevant sports body or rights holder. Sports<br />
rights inventories are charged to the Income<br />
Statement as the sporting events relating to<br />
the rights are broadcast.<br />
(b) Other inventories<br />
Other inventories consist of stocks of<br />
minor spare parts and they are stated at<br />
the lower of cost and net realisable value.<br />
Other inventories are charged to the Income<br />
Statement as they are consumed for repairs<br />
and maintenance.<br />
10. Provisions<br />
A provision is recognised when: the Group<br />
has a present obligation (either legal or<br />
constructive) as a result of a past event;<br />
it is probable that an outflow of economic<br />
benefits will be required to settle the<br />
obligation; and a reliable estimate can<br />
be made of the amount of the obligation.<br />
Provisions are measured at the Authority<br />
members’ best estimate of the expenditure<br />
required to settle the obligation at the<br />
balance sheet date and are discounted to<br />
present value where the effect is material.<br />
Where the Group anticipates that a provision<br />
will be reimbursed, the reimbursement is<br />
recognised as a separate asset when it is<br />
virtually certain that the reimbursement will<br />
arise.<br />
11. Employee benefits<br />
(a) Retirement benefit obligations<br />
The Group, through the RTÉ<br />
Superannuation Scheme, the RTÉ Defined<br />
Contribution Pension Scheme and other<br />
defined contribution schemes, makes<br />
pension contributions for a substantial<br />
number of employees.<br />
In relation to the defined contribution<br />
schemes, contributions are accrued and<br />
recognised in the Income Statement in<br />
the period in which they are earned by the<br />
relevant employees.<br />
For the RTÉ Superannuation Scheme,<br />
a funded contributory defined benefit<br />
scheme, the difference between the market<br />
value of the scheme’s assets and the<br />
actuarially assessed present value of the<br />
scheme’s liabilities, calculated using the<br />
projected unit credit method, is disclosed<br />
as an asset/liability in the balance sheet,<br />
net of deferred tax (to the extent that it<br />
is recoverable). The amount charged to<br />
the Income Statement is the actuarially<br />
determined cost of pension benefits<br />
promised to employees earned during<br />
the year plus any benefit improvements<br />
granted to members during the year.<br />
The expected return on the Superannuation<br />
Scheme’s assets during the year and the<br />
increase in the scheme’s liabilities due to<br />
the unwinding of the discount during the<br />
year are shown as financing costs in the<br />
Income Statement. Any difference between<br />
the expected return on assets and that<br />
actually achieved, and any changes in the<br />
liabilities due to changes in assumptions<br />
or because actual experience during the<br />
year was different to that assumed, are<br />
recognised as actuarial gains and losses in<br />
the statement of recognised income and<br />
expense.<br />
(b) Termination benefits<br />
Termination benefits are recognised as an<br />
expense when the Group is demonstrably<br />
committed, without realistic possibility<br />
of withdrawal, to a formal detailed plan<br />
to either terminate employment before<br />
the normal retirement date, or to provide<br />
termination benefits as a result of an offer<br />
made to encourage voluntary redundancy.<br />
Termination benefits for voluntary<br />
redundancies are recognised as an expense<br />
if the Group has made an offer of voluntary<br />
redundancy, if it is probable that the offer<br />
will be accepted, and the number of<br />
acceptances can be estimated reliably.<br />
(c) Short-term benefits<br />
Short-term employee benefit obligations are<br />
measured on an undiscounted basis and are<br />
expensed as the related service is provided.<br />
12. Income tax<br />
(a) Recognition<br />
Income tax comprises current and deferred<br />
tax. Income tax expense is recognised in the<br />
Income Statement except to the extent that it<br />
relates to items recognised directly in equity,<br />
in which case it is recognised in equity.<br />
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