Annual Report 2019

166 Transport International Holdings Limited 2019 Annual Report Notes to the Financial Statements (Expressed in Hong Kong dollars unless otherwise indicated) 1 Significant accounting policies (continued) (u) Revenue and other income Income is classified by the Group as revenue when it arises from the provision of services or the use by others of the Group’s assets under leases in the ordinary course of the Group’s business. Revenue is recognised when control over service is transferred to the customer, or the lessee has the right to use the asset, at the amount of promise consideration to which the Group is expected to be entitled, excluding those amounts collected on behalf of third parties. Revenue excludes value added tax or other sales taxes and is after deduction of any trade discounts. Further details of the Group’s revenue and other income recognition policies are as follows: (i) Fare revenue from franchised public bus services and revenue from non-franchised transport services are recognised when the related services are provided. (ii) Income from media sales is recognised when the related advertisements are telecast or commercials appear before the public. (iii) Income from media sales management and administrative services, production of advertisements, and advertising agency services is recognised when the related services are rendered. (iv) Interest income is recognised as it accrues using the effective interest method. For financial assets measured at amortised cost or FVOCI (recycling) that are not credit-impaired, the effective interest rate is applied to the gross carrying amount of the asset. For credit-impaired financial assets, the effective interest rate is applied to the amortised cost (i.e. gross carrying amount net of loss allowance) of the asset (see note 1(n)(i)). (v) Dividend income from unlisted investments is recognised when the shareholder’s right to receive payment is established. (vi) Rental income receivable under operating leases is recognised in profit or loss in equal instalments over the periods covered by the lease term, except where an alternative basis is more representative of the pattern of benefits to be derived from the use of the leased asset. Lease incentives granted are recognised in profit or loss as an integral part of the aggregate net lease payments receivable. Contingent rentals are recognised as income in the accounting period in which they are earned. (vii) Government grants that compensate the Group for expenses incurred are recognised as income in profit or loss on a systematic basis in the same periods in which the expenses are incurred.