2017 WEL Networks
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Annual Report
36
(i)
Electricity Line revenue
The Group invoices its customers (predominately electricity
retailers) monthly for electricity delivery services across
the region’s lines network. The reported net line revenue
includes the provision for the annual customer discounts
that are accrued on a monthly basis but only paid to
customers once a year. Unclaimed discounts are released
against the statement of comprehensive income.
(ii)
Sale of fibre network access services
The Group recognises revenue as it provides services to
retail service providers. Billing for network access services
are made on a monthly basis. Unbilled revenue from the
date of connection to the billing cycle date is recognised
in the month of service. Revenue is deferred in respect
of the portion of the fixed monthly charges that have
been billed in advance. Revenue from installations and
connections are recognised upon completion of the
installation or connection.
(iii)
Sales of services, contracting sales and
third party contributions
Sales of services, contracting sales and third party
contributions are recognised in the accounting period
in which the services are rendered, by reference to
completion of the specific transaction assessed on the
basis of the actual service provided as a proportion of the
total services to be provided.
(iv)
Operating lease revenue
Operating lease revenue is recognised on a straight-line
basis over the term of the lease.
(v)
Interest income
Interest income is recognised using the effective interest
method. When a loan and receivable is impaired, the
Group reduces the carrying amount to its recoverable
amount, being the estimated future cash flow discounted
at the original effective interest rate of the instrument, and
continues unwinding the discount as interest income.
Interest income on impaired loan and receivables is
recognised using the original effective interest rate.
(vi)
Dividend income
Dividend income is recognised when the right to receive
payment is established.
(d)
Income tax
The tax expense for the period comprises current and
deferred tax. Tax is recognised in the profit and loss
component of the statement of comprehensive income,
except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
The current income tax charge is calculated on the basis
of the tax laws enacted or substantively enacted at the
balance sheet date in the countries where the Group and
its subsidiaries operate and generate taxable income.
Management periodically evaluates positions taken in
tax returns with respect to situations in which applicable
tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred income tax is recognised, using the liability
method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying
amounts in the financial statements.
However, deferred tax liabilities are not recognised
if they arise from the initial recognition of goodwill;
deferred income tax is not accounted for if it arises
from initial recognition of an asset or liability in a
transaction other than a business combination that at
the time of the transaction affects neither accounting
nor taxable profit or loss.
Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantively enacted by
the balance sheet date and are expected to apply when
the related deferred income tax asset is realised or the
deferred income tax liability is settled.
WEL NETWORKS LIMITED
Notes to the financial statements
For the year-ended 31 March 2017
(continued)
