Annual Reports - RTÉ

ANNUAL REPORT & GROUP FINANCIAL STATEMENTS 2007(d) Network and facilities incomeNetwork and facilities income arises fromthe use of and access to, the Group’stransmission network and studio facilitiesprovided to third parties. Amounts arerecognised as the facilities are madeavailable to third parties.(e) Circulation and events incomeCirculation income arises from thepublication and circulation of the RTÉGuide and is stated net of fees due to thedistributor and end-retailer. Revenue isrecognised on the basis of the net copiessold at the end of the sales cut-off period foreach issue.Events income arises from public eventsorganised by RTÉ Performing Groups. Itis recognised as the events are held andamounts fall due.(f) Content, merchandising andrelated incomeContent, merchandising and related incomerepresents amounts generated from RTÉcontent and services provided to third partiesthrough a range of means, including theGroup’s internet facilities, Aertel teletext,the external sale of RTÉ content andamounts earned through other commercialservices provided by the Group. Revenueis recognised as the service is provided orupon delivery of goods to the third party.4. Segment reportingA segment is a distinguishable componentof the Group that is engaged either inproviding related products or services(business segment), or in providing productsor services within a particular economicenvironment (geographical segment), whichis subject to risks and returns that aredifferent from those of other segments.Arising from the Group’s internalorganisation structure and its system ofinternal financial reporting, the Group’sprimary reporting segment, under IAS14 Segment Reporting, is by IntegratedBusiness Division (IBD). Each IBD is aseparate division organised and managedseparately according to the nature of theservices and products provided.The Group has only one secondary(geographical) segment, as it currentlyprovides its products and services exclusivelywithin one economic environment – Ireland.5. Foreign currency transactionsTransactions denominated in foreigncurrencies are translated to the respectivefunctional currencies of group entitiesat exchange rates at the dates of thetransactions. Monetary assets and liabilitiesdenominated in foreign currencies at thereporting date are translated to the functionalcurrency at the exchange rate at that date.Any gain or loss arising from a change inexchange rates subsequent to the date of thetransaction is included as an exchange gainor loss in the Group Income Statement.Non-monetary assets and liabilities aredenominated in foreign currencies that aremeasured at fair value are retranslated to thefunctional currency at the exchange at thedate that the fair value was determined.6. Property, plant and equipment(a) Recognition and measurementProperty, plant and equipment is shownat historical cost, net of accumulateddepreciation and any accumulatedimpairment losses.Cost includes expenditure that is directlyattributable to the acquisition of the asset.The cost of self-constructed assets includesthe cost of materials and direct labour, anyother costs directly attributable to bringingthe asset to a working condition for itsintended use, and the costs of dismantlingand removing the items and restoring thesite on which they are located. Purchasedsoftware that is integral to the functionalityof the related equipment is capitalised aspart of that equipment.Subsequent costs are included in anasset’s carrying amount or recognised as aseparate asset, as appropriate, only whenit is probable that future economic benefitsassociated with the item will flow to theGroup and the cost of the replaced itemcan be measured reliably. All other repairsand maintenance costs are charged to theIncome Statement during the financial periodin which they are incurred.(b) DepreciationDepreciation is provided on all property, plantand equipment, except freehold land, at ratescalculated to write off the cost, less estimatedresidual value, of each asset on a straight linebasis over its expected useful life.The principal rates used are as follows:Buildings 2.5% – 25%Plant and equipment 7.5% – 20%Fixtures and fittings 10% – 25%Capital projects in progress representthe cost of purchasing and installingproperty, plant and equipment ahead oftheir commission into use. Depreciationis charged on assets from the date ofcommissioning.When parts of an item of property, plantand equipment have different useful lives,they are accounted for as separate items(major components) of property, plant andequipment and depreciated accordingly.(c) ImpairmentIn accordance with IAS 36 Impairment ofassets the carrying amount of items ofbuildings and plant and equipment arereviewed at each balance sheet date todetermine whether there is any indicationof impairment and are subjected toimpairment testing when events or changesin circumstances indicate that the carryingvalues may not be recoverable. If any suchindication exists, then the assets recoverableamount is estimated.7. Intangible assets(a) Recognition and measurementAn intangible asset, which is an identifiablenon-monetary asset without physicalsubstance, is recognised to the extentthat it is probable that the expected futureeconomic benefits attributable to the assetwill flow to the Group and that its cost canbe measured reliably. The asset is deemedto be identifiable when it is separable orwhen it arises from contractual or other legalrights, regardless of whether those rights aretransferable or separable from the Group orfrom other rights and obligations.Intangible assets are carried at cost lessany accumulated amortisation and anyaccumulated impairment losses.The Group’s intangible assets are entirelysoftware-related in nature.Subsequent expenditure is capitalised onlywhen it increases the future economicbenefits embodied in the specific asset towhich it relates.(b) AmortisationIntangible assets, with finite useful economiclives, are amortised to the income statementon a straight line basis over their estimateduseful lives from the date they are availablefor use. In the case of computer software,the useful economic lives are generally 3 to5 years.41