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46

3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Impairment of Non-Financial Assets

At the end of each reporting period, SIGA reviews the carrying amount of its tangible and intangible assets to determine whether

there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount

of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the

recoverable amount of an individual asset, SIGA estimates the recoverable amount of the cash-generating unit to which the asset

belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual

cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units that a reasonable and

consistent basis of allocation can be identified.

Recoverable amount is the higher of the fair value less costs to sell and value in use. In assessing value in use, the estimated

future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time

value of money and the risks specific to the asset for which estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying

amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately

in the statement of comprehensive income.

When an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the

revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that

would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A

reversal of an impairment loss is recognized immediately in the statement of comprehensive income.

Revenues

Gaming revenue (slot and table revenues) represents 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.

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.

NOTES TO THE FINANCIAL STATEMENTS

Year Ended March 31, 2016