Revenue comprises the fair value of the consideration received or receivable for the provision of passenger transport services, excluding value added tax and discounts. The company recognises revenue when the amount of revenue can be measured reliably, and it is probable that economic benefits will flow to the entity.
Passenger Transport Services
Revenue from the transport of passengers on the company’s 20-berth yacht is recognised when the service is provided, that is, when the voyage takes place. Where voyages span the year end, revenue is recognised on a proportionate basis, reflecting the extent of the service performed by the reporting date.
Where advance payments or deposits are received from customers for future voyages, such amounts are recognised as deferred income within creditors and are subsequently recognised as revenue when the voyage occurs.
If a voyage is cancelled by the customer, the treatment of any amounts retained is assessed based on the terms of the contract and whether a service has been performed or an obligation released. If the company is contractually entitled to retain part or all of a deposit due to customer cancellation and no refund is due, such amounts are recognised as revenue when the cancellation occurs and the company is released from its obligation to perform.