Maxis Berhad | Annual Report 2012

Maxis Berhad // Annual Report 2012 119 FINANCIAL STATEMENTS CORPORATE GOVERNANCE ANALYSIS OF SHAREHOLDINGS OTHER INFORMATION ANNUAL GENERAL MEETING 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (u) Revenue recognition (continued) (i) Telecommunications revenue (continued) 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 devices 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 and the Company’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 and the Company. (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. (w) Contingent liabilities The Group does not recognise a contingent liability but discloses its existence in the financial statements. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in the extremely rare circumstance where there is a liability that cannot be recognised because it cannot be measured reliably. In the acquisition of subsidiaries by the Group under a business combination, the contingent liabilities assumed are measured initially at their fair value at the acquisition date, irrespective of the extent of any non-controlling interests. The Group recognises separately the contingent liabilities of the acquiree as part of allocating the cost of a business combination where their fair values can be measured reliably. Where the fair values cannot be measured reliably, the resulting effect will be reflected in the goodwill arising from the acquisition.