Annual Report 2019

FINANCIAL STATEMENTS 2. Summary of significant accounting policies (cont’d.) 2.22 Employee benefits (cont’d.) 2.22.3 Defined benefit plan The Group operates defined benefit pension plans in Indonesia and Philippines, which require contributions to be made to separately administered funds. The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method. Remeasurements, comprising of actuarial gains and losses, are recognised immediately in the statement of financial position with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods. Past service costs are recognised in profit or loss on the earlier of: – The date of the plan amendment or curtailment; and – The date that the Group recognises related restructuring costs Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Group recognises the following changes in the net defined benefit obligation under ‘staff costs’ in the income statements: – Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non- routine settlements – Net interest expense or income 2.23 Revenue and other income Revenue is measured based on the consideration specified in a contract with a customer and exclude amounts collected on behalf of third parties. The Group recognises revenue when or as it transfers control over a product or service to customer. An asset is transferred when (or as) the customer obtains control of the asset. An entity transfers control of a good or service over time and, therefore satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met: (a) The customer simultaneously receives and consumes the benefits provided by the entity’s performance as the entity performs; (b) The entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or (c) The entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date. If a performance obligation is not satisfied over time in accordance with MFRS 15, an entity satisfies the performance at a point in time. 2.23.1 Passenger revenue Passenger revenue relates to scheduled passenger flight and charter flight income and is recorded net of discounts and includes the related ancillary revenue (including airport and insurance surcharges, administrative fees, baggage fee, assigned seat, cancellation, documentation and other fees, and on-board sale of meals and merchandise). The Group initially recognises all ticket sales as ‘sales in advance’ which is presented as current liabilities in line with the initial application of MFRS 15. Passenger revenue is recorded when the air transportation service is provided (i.e. performance at a point in time). AIRASIA GROUP BERHAD ANNUAL REPORT 2019 251