Amadeus IT Holding, S.A. and Subsidiaries - Investor relations at ...

AMADEUS IT HOLDING, S.A. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED
DECEMBER 31, 2011, AND 2010
(EXPRESSED IN THOUSANDS OF EUROS - KEUR)
Revenue from travel provider bookings is recognized based on the number of
bookings and when the booking is made, and for services in the month on which
services are rendered. Airline bookings revenue is presented net of cancellations
made and an allowance for future cancellations (see paragraph o).
Another component of the distribution revenues are the non-booking revenues.
This principally relates to subscriber services agreements entered by the Group,
mainly with travel agents, which provide the user the tools and services that
permit access to Amadeus system. The customer is charged a fee and revenue is
recognized when services are provided.
Revenue derived from charges to customers on a transactional basis for the use
of our IT solutions is recognised when the reservation is used by the end
customer. Users of these services (Altéa suite mainly) have access to a complete
portfolio of technology solutions that automate business processes of travel
providers (such as reservations, inventory management and operations).
The Group also generates revenues from direct sales offices and web pages of
certain airlines (“system users”) which are connected directly to Amadeus
system. The airline receives a payment from the group in connection with these
own inventory sales, these payments are being accounted for as a deduction of
revenue.
The Group has certain content and other agreements with airlines. Pursuant a
content agreement the airlines will give the Group access to their schedule
information, seat inventory and fares for flights for sale in the territories covered in
the respective agreements. Payments made by the Group to airlines in the
framework of these agreements are accounted for as a deduction of revenue.
The accounting treatment of content agreements and payments to system users ,
described above, is in accordance with Emerging Issues Task Force Issue N 01-
09, Accounting for consideration given by a vendor to a customer (Including a
reseller of the vendor’s products) (EIFT 01-09).
Revenues obtained from customization and implementation of IT solutions is
recognised when services are provided to customers over the term of the
agreement with those customers or during the useful life of the asset developed
for the customers, if the agreement does not state a fixed term.
Revenue for sales where the Group acts as a principal and purchases products
for resale (airline seats, hotel bookings, dynamic and pre-packaged tours), is
recognised when reservations are used by the end customer. For reservations
paid but not yet used by the end customer, revenue recognition is deferred and
recognized as a liability until the reservation is used by the end customer.
Revenue for sales where the Group acts as an agent is recognized on a net
basis, representing the amount of the commission received.
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