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StarHub Ltd Annual Report 2015

2.15 Revenue recognition

Revenue comprises fees earned from telecommunications services, broadband access, Pay TV, related advertising space and
sale of equipment. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the revenue can be reliably measured. Revenue is recognised in the income statement as follows: Overview

• Revenue from telecommunications, broadband and cable television services and advertising space is recognised at the
time such services are rendered. Revenue billed in advance of the rendering of services is deferred and presented in the
statement of financial position as unearned revenue.

• R evenue from sale of pre-paid phone cards for which services have not been rendered is deferred and presented in the
statement of financial position as unearned revenue. Upon the expiry of pre-paid phone cards, any unutilised value of
the cards is taken to the income statement.

• Revenue from sale of equipment is recognised upon delivery and acceptance of the equipment sold.

• Revenue from bundled products and services is recognised based on values allocated to the individual elements of the Strategy
bundled products and services in accordance to the earning process of each element.

2.16 Finance income and costs Performance

Finance income comprises interest income on bank deposits. Interest income is recognised on a time-apportioned basis taking
into account the principal outstanding at the applicable rate.

Finance costs comprise interest expense and similar charges. They are recognised in the income statement using the effective
interest method, except to the extent that they are capitalised as being directly attributable to the acquisition, construction or
production of an asset which necessarily takes a substantial period of time to prepare for its intended use or sale.

2.17 Government grants

Government grants received, which are designated for the purchase of property, plant and equipment, are accreted to the
income statement on a straight-line basis over the estimated useful lives of the related assets, so as to match the related
depreciation expense.

Government grants received, which are designated for operating expenditure, are recognised on a systematic basis in the Governance & Sustainability
income statement over the periods necessary to match the related cost which they are intended to compensate.

2.18 Marketing and promotions

Advertising costs are expensed when incurred. The direct costs of acquiring customers, including commission and promotion
expenses, are recognised in the income statement when incurred.

2.19 Operating leases

Where the Group has the use of assets under operating leases, payments made under the leases are recognised in the income
statement on a straight-line basis over the terms of the lease. Lease incentives received are recognised in the income statement
as an integral part of the total lease payments made. Contingent rentals are charged to the income statement in the accounting
period in which they are incurred.

Financials