Page 47 - 2012_Annual Report

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Saskatchewan Indian Gaming Authority Inc.
Notes to the Financial Statements
year ended March 31, 2012
45
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REVENUES
Gaming revenue (slot and table revenues) represent the net win from those gaming activities calculated as the difference between
amounts wagered and pay-outs by the casino. Gaming revenues are net of accruals for anticipated payouts of progressive jackpots
and promotion allowances from the players club program.
Ancillary revenues include hotel, food, beverage, and concession revenue and such revenues are recognized when the goods and
services are provided.
Revenues exclude the retail value of food, beverage and other promotional allowances provided on a complimentary basis to guests.
The cost of providing the complimentary items is included in direct operating expenses.
COMMITMENT OF NET PROCEEDS OF TABLE OPERATIONS
Liabilities are recorded when amounts to be distributed are approved by the Board of Directors.
ALLOCATION OF EXPENSES
Table game operations
Costs allocated to table game operations include actual direct expenses, and an allocation of indirect site expenses based on the
percentage of gross table revenue to total revenue on an individual casino site basis.
Central office costs are allocated to table game operations based on a percentage of gross table revenue to total revenue. These
central office costs are then allocated to each casino site based on the percentage of each casino site’s table net income to all
casinos’ table net income before the allocation of indirect site expenses.
Slot machine operations
Costs allocated to slot machine operations include actual direct expenses, and an allocation of indirect site expenses based on the
percentage of gross slot revenue to total revenue on an individual casino site basis.
All remaining central office costs net of table games and ancillary allocations are allocated to slot operations. These central office
costs are then allocated to each casino site based on its percentage of casino slot net income net of indirect site expenses.
Ancillary operations
Costs allocated to ancillary operations include actual direct expenses, and an allocation of indirect site expenses based on the
percentage of gross ancillary revenue to total revenue on an individual casino site basis.
Central office costs are allocated to ancillary operations based on a percentage of gross ancillary revenue to total revenue. These
central office costs are then allocated to each casino site based on the percentage of each casino site’s ancillary net income to all
casinos’ ancillary net income before the allocation of indirect site expenses.
CUSTOMER LOYALTY PROGRAM
As part of its customer loyalty initiative, SIGA offers a players club program to patrons. Under the program, club members
accumulate reward points based on amounts wagered on slot machines. Members can redeem their points for cash or vouchers
for free or discounted goods or services. SIGA records the points earned as a reduction of gaming revenue. Accounts payable
and accrued liabilities are accrued for the estimated cost of the earned points balance at the end of the period under the players
club program. If the patron chooses to redeem their points for a voucher for free or discounted goods or services, the revenue is
determined by the fair value of the undelivered goods and services related to a customer loyalty program and remains in accounts
payable and accrued liabilities until the promotional consideration is provided.