3 Revenue and other income (continued)
(b) Revenue recognition
AASB 15 establishes principles for reporting the nature, amount, timing, and uncertainty of revenue and cash
flows arising from an entity’s contracts with customers and requires application of a five-step process to identify
the contract with the customer, identify performance obligations in the contract, determine transaction price,
allocate the transaction price to the performance obligations and recognise revenue when performance
obligations are satisfied.
Revenue is recognised for the major business activities as follows:
(i) Data centre services
Data centre services revenue primarily consist of recurring monthly service fees and upfront project fees.
Revenue from the provision of recurring monthly service fees is recognised in the accounting period in which the
services are rendered. Project fees primarily comprise installation services relating to a customer’s initial
deployment. As this is not considered to be a distinct service, revenue is deferred and recognised over the term
of the contract with the customer, taking into account renewal options that are held by the customer.
The Group applies the practical expedient in the revenue standard and does not disclose information about the
transaction price allocated to remaining performance obligations on contracts that are unsatisfied, as the Group
has the right to consideration from its customers in an amount that corresponds directly with the value to the
customer of the Group’s services to date. This is applied to all its data centre services revenue, on the basis that
the upfront project fees are not a significant portion of each contract.
The Group enters into contracts with customers that guarantee certain performance measures such as uptime
and on time delivery of services. If these guarantees of service performance are not achieved, the Group reduces
revenue for any credits or cash payments that may be due to customers under contract. Key areas of estimation
include the amount of the service credits, the likelihood that the service credits will be claimed, and the time
period over which they impact revenue.
Customer incentives provided by way of upfront discounts are contract assets that are amortised via a reduction
in revenue over the expected contract life – refer to Note 6(b).
(ii) Interest income
Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial
asset, except for financial assets that subsequently become credit-impaired. For credit-impaired financial assets,
the effective interest rate is applied to the net carrying amount of the financial asset (after deduction of the loss
(iii) Distributions from investments
Distributions from investments are recognised as revenue when the rig
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