Annual Report & Accounts 2005 - Notes to the Financial Statements
Revenue comprises proceeds from gaming activities. In accordance with industry practice, gaming
revenue represents ‘‘customer drop’’ or net revenue which comprises amounts staked net of customer
winnings and not the handle or wagered amount.
(i) Operating lease payments
Payments made under operating leases are recognised in the income statement on a straight-line basis
over the term of the lease.
(ii) Net financing costs
Net financing costs comprise interest payable on borrowings calculated using the effective interest rate
method, interest receivable on funds invested, dividend income, foreign exchange gains and losses.
Interest income is recognised in the income statement as it accrues, using the effective interest method.
Dividend income is recognised in the income statement on the date the entity’s right to receive
payments is established.
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised
in the income statement except to the extent that it relates to items recognised directly in equity, in
which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous
Deferred tax is provided using the balance sheet liability method, providing for temporary differences
between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. The following temporary differences are not provided for: goodwill not
deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting nor
taxable profit, and differences relating to investments in subsidiaries to the extent that they will probably
not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected
manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates
enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is more probable than not that future taxable
profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the
extent that it is no longer probable that the related tax benefit will be realised.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as
the liability to pay the related dividend.
(o) Segment reporting
A segment is a distinguishable component of the Group that is engaged either in providing products or
services (business segment), or in providing products or services within a particular economic
environment (geographical segment), which is subject to risks and rewards that are different from
those of other segments.