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Annual Report & Accounts 2014 - NOTES
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Where promotional bonuses apply to customers playing a variety of products through the same wallet, bonuses are allocated pro-rata to the net win. B2B income comprises the amounts receivable for services to other online gaming operators. income is recognised when a right to consideration has been obtained through performance and reflects contract activity during the year. until 19 march 2013 B2B income included amounts due for the provision of services to east pioneer corporation B.V. (“epc”). the amounts have been shown as income as they represent normal trading transactions and match costs incurred by the group as a result of providing services to epc. A reconciliation of the ngR attributable to the B2B partner to the B2B income recognised in these financial statements is shown in note 2. From 19 march 2013 the results of epc were fully consolidated into the group following the acquisition of sportingbet pLc as required under iFRs. 1.12 financial expenses Financial expenses comprise interest payable on borrowings calculated using the effective interest rate method. 1.13 exceptional items exceptional items are those that in the judgement of the Directors, need to be disclosed by virtue of their size or incidence in order for the user to obtain a proper understanding of the financial information. 1.14 financial income Financial income is interest income recognised in the income statement as it accrues, using the effective interest method. 1.15 tax current tax is the tax currently payable based on taxable profit for the year. Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases. however, deferred tax is neither provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with investments in subsidiaries is not provided if reversal of these temporary differences can be controlled by the group and it is probable that reversal will not occur in the foreseeable future. in addition, tax losses available to be carried forward as well as other income tax credits to the group are assessed for recognition as deferred tax assets. Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income. current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the balance sheet date. changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income statement, except where they relate to items that are charged or credited directly to other comprehensive income or equity in which case the related deferred tax is also charged or credited directly to other comprehensive income or equity as appropriate. 1.16 segment Reporting the Board has reviewed and confirmed the group's reportable segments in line with the requirements of iFRs 8 'operating segments'. the segments disclosed below are aligned with the reports the group's chief executive reviews to make strategic decisions. sports: being the gains and losses in respect of bets placed on sporting events in the year gaming: being the net win in respect of bets placed on casino, poker, bingo that have concluded in the year, along with deposit charges debited to customer accounts. corporate assets which are not directly attributable to the business activities of any operating segment are not allocated to a segment. 1.17 financial instruments Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual provisions of the instruments. GVC HOLDINGS PLC ANNUAL REPORT 2014 33 notes to the consolidated financial statements