Page 47 - SIGA Annual Report 2014

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MARCH 31, 2014
Allocation of Expenses (continued)
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 recorded for the estimated cost of the earned points balance at the end of the year 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.
Employee Benefits
A defined contribution pension plan is a post-employment benefit plan under which an entity pays fixed contributions into a
separate entity and will have no legal or constructive obligation to pay further amounts. SIGA’s matching contributions to the
defined contribution pension plan for employees are recorded as salaries and benefits expense in the statement of comprehensive
income when services are rendered by employees.
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.
Foreign Currency
Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to SIGA’s functional currency
at the exchange rate at that date. Revenues and expenses are translated at rates of exchange prevailing on the transaction dates.
Translation gains and losses on foreign currency denominated monetary items are taken into income in the current year.
Financial Instruments
Classification and measurement
All financial instruments are initially measured at fair value, plus transaction costs, except in the case of financial assets and
liabilities classified as fair value through profit or loss (“FVTPL”). The classification of financial instruments at initial recognition
depends on the purpose and management’s intention for which the financial instruments were acquired or issued, their
characteristics and SIGA’s designation of such instruments. Measurement in subsequent years depends on whether the financial
instruments have been classified as FVTPL, loans and receivables, and other liabilities. An explanation of the nature of these
classifications follows. SIGA’s classifications of its financial instruments are disclosed in Note 20.
Financial assets are classified as at FVTPL when the financial asset is either held-for-trading or it is designated as at FVTPL.
A financial asset is classified as held-for-trading if:
It has been acquired principally for the purpose of selling it in the near term; or
On initial recognition it is part of a portfolio of identified financial instruments that SIGA manages together and has a recent actual
pattern of short-term profit-taking; or
It is a derivative that is not designated and effective as a hedging instrument.