Annual Report 2011/12 - International Entertainment Corporation

Notes to the Consolidated Financial StatementsFor the year ended 31 March 20123. SIGNIFICANT ACCOUNTING POLICIES (Continued)Revenue recognitionRevenue is measured at the fair value of the consideration received or receivable and represents amounts receivablefor goods sold and services provided in the normal course of business, net of discounts and sales related taxes.Rental income from properties let to Philippine Amusement and Gaming Corporation (“PAGCOR”) under operatingleases is recognised at a certain percentage of net gaming revenue of the casino (less franchise tax) or a fixed rentalamount, whichever is higher. Fixed rental income is recognised in the profit or loss on a straight-line basis over thelease term with PAGCOR. Contingent rental income is recognised in the profit or loss in the periods in which they areearned.Hotel revenue from room rentals, food and beverage sale and other ancillary service is recognised when service isrendered.Sales of goods are recognised when goods are delivered and title has been passed.Service income is recognised when the services are rendered.Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to theGroup and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by referenceto the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts theestimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount oninitial recognition.Dividend income from investments is recognised when the shareholders’ rights to receive payment have beenestablished.Financial instrumentsFinancial assets and financial liabilities are recognised in the consolidated statement of financial position when a groupentity becomes a party to the contractual provisions of the instrument.Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributableto the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilitiesat fair value through profit or loss (“FVTPL”)) are added to or deducted from the fair value of the financial assets orfinancial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition offinancial assets or financial liabilities at FVTPL are recognised immediately in profit or loss.Financial assetsThe Group’s financial assets are classified into one of the four categories, including financial assets at FVTPL, loansand receivables, available-for-sale financial assets and held-to-maturity investments. All regular way purchases orsales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales arepurchases or sales of financial assets that require delivery of assets within the time frame established by regulation orconvention in the marketplace.The accounting policies adopted in respect of each category of financial assets are set out below.International Entertainment Corporation - Annual Report 2011/12 39