Accounting Policies continued AFRICAN DAWN 51 ANNUAL REPORT 2015 1.16 Revenue (continued) The deferred portion of the fees is recorded in the statement of financial position as a provision for deferred administration fees. The Group does not defer any related operating costs, as these are all internal costs which are not directly attributable to individual transactions and as such are primarily absorbed infrastructure costs. • Monthly service fees These are fees which form an integral part of the effective interest rate and are charged to the customers on a monthly basis. These fees are recognised as part of the effective interest rate over the shorter of the original contractual term and the actual term of the loans and receivables. Beyond the original contractual term of the loan, the fee is recognised in profit or loss as it is charged to the customer on a monthly basis. While both these components are regarded as integral parts of the effective interest rate, they are not accounted for as interest income, but as non-interest income. Rendering of services The Group generates revenues from consulting and advisory services. Consideration received for these services is initially deferred, included in other liabilities, and is recognised as revenue in the period when the service is performed. When the transaction involves the rendering of services and the outcome can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the reporting date. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied: • The amount of revenue can be measured reliably; • It is probable that the economic benefits associated with the transaction will flow to the entity; • The stage of completion of the transaction at the reporting date can be measured reliably; and • The costs incurred for the transaction and the costs to complete the transaction can be measured. The Group determines the stage of completion by considering both the nature and timing of the services provided and its customer’s pattern of consumption of those services, based on historical experience. Where the promised services are characterised by an indeterminate number of acts over a specified period of time, revenue is recognised on a straight- line basis. Revenue from consulting services is recognised when the services are provided by reference to the contract’s stage of completion at the reporting date using percentage complete method. Rental income The Group earns rental income properties in possession. Rental income is recognised on a straight-line basis over the term of the lease. Investment income Investment income relates to interest earned on cash and cash equivalents and is recognised on the same basis as interest income as outlined above. Dividend income Dividend income is recognised when the right to receive payment is established on the ex-dividend date for equity instruments and is included in dividend income under non-interest revenue. Dividend income is recognised separately from other fair value movements.
AFRICAN DAWN 2015 Annual Report
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