(e) Revenue recognition
The Corporation recognizes operating revenues when the following criteria are met:
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the amount of revenue can be measured reliably; |
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the receipt of economic benefits associated with the transaction is probable; |
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the costs incurred or to be incurred in respect of the transaction can be measured reliably; |
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the stage of completion can be measured reliably where services have been rendered; and |
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significant risks and rewards of ownership, including effective control, have been transferred to the buyer where goods have been sold. |
The portion of revenue that is unearned is recorded under “Deferred revenue” when customers are invoiced.
The Corporation provides services under arrangements with multiple deliverables, for which there are two separate accounting units: one for subscriber services (cable television, Internet access, cable or mobile telephony and over-the-top video services, including connection costs and rental of equipment); the other for equipment sales to subscribers. Components of multiple deliverable arrangements are separately accounted for, provided the delivered elements have stand-alone value to the customer and the fair value of any undelivered elements can be objectively and reliably determined. Arrangement consideration is allocated among the separate accounting units based on their relative fair values.
The Corporation recognizes revenues for each of its main activities as follows:
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Operating revenues from subscriber services such as cable television, Internet access, cable and mobile telephony and over-the-top video services are recognized when services are provided. Promotional offers and rebates are accounted for as a reduction in the service revenue to which they relate; |
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Revenues from equipment sales to subscribers and their costs are recognized in income when the equipment is delivered. Promotional offers related to equipment, with the exclusion of mobile devices, are accounted for as a reduction in related equipment sales on delivery, while promotional offers related to the sale of mobile devices are accounted for as a reduction in related equipment sales on activation; |
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Operating revenues related to service contracts are recognized in income over the life of the specific contracts on a straight-line basis over the period in which the services are provided; |
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Cable connection revenues are deferred and recognized as revenues over the estimated average period that subscribers are expected to remain connected to the network. The incremental and direct costs related to cable connection costs, in an amount not exceeding the revenue, are deferred and recognized as an operating expense over the same period. The excess of those costs over the related revenues is recognized immediately in income. |