1. Summary of Significant Accounting Policies

(a) Basis of accounting

Below we set out our key accounting policies. A full list of accounting policies can be found in the appendix to the Group Financial Statements on pages 151 to 157. The accounting policies have been applied consistently in dealing with items which are considered material in relation to the Group and RTÉ financial statements except for the new standards and amendments to standards outlined in the appendix to the Group Financial Statements.

(i) Reporting entity

RTÉ is a statutory corporation established under the Broadcasting Authority Act, 1960 and is domiciled in Ireland. The consolidated financial statements of RTÉ as at and for the year ended 31 December 2020 comprise the statutory corporation and all entities controlled by it (together referred to as the ‘Group’).

(ii) Statement of compliance

The RTÉ and Group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) that are effective for the year ended 31 December 2020 and are applied in accordance with the provisions of broadcasting legislation. The Group has also elected to present both its consolidated and RTÉ parent entity financial statements in accordance with the provisions of the Companies Act 2014 in so far as it provides additional information. Accordingly, RTÉ’s parent statement of financial position, statement of cash flows and statement of changes in equity have also been presented with the consolidated financial statements as would ordinarily be required by the Companies Act 2014. RTÉ’s Group Income Statement has been adapted as permitted by Companies Act 2014, Schedule 3 Part II, Section A4(5).

(iii) Basis of preparation

The RTÉ and Group financial statements have been prepared on the historical cost basis as modified by the measurement at fair value of derivative financial instruments and retirement benefit obligations.

The Group financial statements are prepared in euro, rounded to the nearest thousand (€000), which is the functional currency of all subsidiaries in the Group.

The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. The key areas involving significant judgement or complexity, or areas where assumptions and estimates are significant to the Group’s financial statements, relate primarily to the valuation of the defined benefit pension scheme and financial instruments and are documented in the relevant accounting policies and in the related notes.

(iv) Going Concern

In assessing the going concern position of the Group for the Consolidated Financial Statements for the year ended 31 December 2020, the Board members have considered the Group’s cash flows, liquidity and business activities. At 31 December 2020, the Group had cash and liquid investments balances of €87 million and undrawn financing facilities of €15 million available.

Based on the Group’s forecasts for the foreseeable future, which include the expected cash flow impact of Covid-19, the Board members have adopted the going concern basis in preparing the Financial Statements. They have made this assessment after consideration of the Group’s forecasted cash flows for the foreseeable future, including the assessment of possible variances in those forecasts. The Board members believe that combined with existing cash resources and its banking facilities, the Group will have sufficient cash resources available to meet its liabilities as they fall due.

(v) Adoption of new and revised standards

In preparing the Group financial statements for the current year, the Group has adopted a number of new amendments to standards which have not had a material impact on disclosures to the financial statements.

(vi) Standards in issue but not yet effective

A complete list of standards that are in issue but not effective until 2021 or beyond is included within our full accounting policies in an appendix to the Annual Report. The directors do not expect that the adoption of the new standards will have a material impact on the financial statements of the Group in future periods.

Key Accounting Policies

(b) Revenue recognition

Revenue, which excludes VAT and transactions between companies in the Group, comprises income arising from licence fees; advertising sales; sponsorship; the use of the Group’s facilities and transmission network; circulation and events income; and content, merchandising and related income. Revenue is stated net of any settlement and volume discounts.

IFRS 15 applies to all the Group’s revenue streams apart from licence fee revenue which is accounted for under IAS 20 Accounting for Government Grants and Disclosure of Government Assistance. The other revenue streams, as outlined below, are recognised upon transfer of the promised services or goods to the customers. The Group has adopted the five-step approach to the timing of revenue recognition based on performance obligations in customer contracts. This involves identifying the contract with customers, identifying the performance obligations, determining the transaction price, allocating the price to the performance obligations within the contract and recognising revenue when the performance obligations are satisfied.

(i) Licence fee revenue

The Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media (DTCAGSM) has nominated An Post to be the collection agent for the TV licence fee. Licence fee revenue is collected by An Post and paid over to the DTCAGSM, net of collection costs. In addition, licence fee revenue is payable by the Department of Employment Affairs and Social Protection (DEASP) on behalf of individuals eligible for a “free” television licence. This revenue is paid monthly by the DEASP to the DTCAGSM.

The DTCAGSM makes a non-repayable “grant-in-aid” to RTÉ from these licence fees collected, as provided in Section 123 of the Broadcasting Act 2009 as amended by section 69 of the Communications Regulation (Postal Services) Act 2011. This equates to the amounts paid to it by the DEASP, together with the amounts collected by An Post net of collection costs and a 7% levy to the Broadcasting Fund as determined by the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media.

Licence fee revenue payable by the DEASP is recognised upon receipt. All other licence fee income is recognised upon notification by An Post of the number of licences sold in the period.

(ii) Advertising and sponsorship income

Television advertising income is recognised on delivery of a campaign. All other advertising income is recognised on transmission/publication. Advertising income is stated net of agency commissions. Sponsorship income is recognised evenly over the life of the sponsored programme, publication, etc.

(iii) Transmission and facilities income

Transmission and facilities income arise from the use of and access to the Group’s transmission, distribution and multiplexing network and studio facilities provided to third parties. Amounts are recognised as the facilities are made available to third parties.

(iv) Circulation and events income

Circulation income arises from the publication and circulation of the RTÉ Guide and is stated gross. Revenue is recognised on the basis of the net copies sold at the end of the sales cut-off period for each issue.

Events income arises from public events organised by RTÉ Orchestras. It is recognised as the events are held and amounts fall due.

(v) Content, merchandising and related income

Content, merchandising and related income represents amounts generated from RTÉ content and services provided to third parties. Revenue is recognised as the service is provided or upon delivery of goods to the third party.

(c) Segment reporting

Segmental analysis, prepared in accordance with IFRS 8 Operating segments, is set out in note 2(d). RTÉ’s primary reporting segments are its divisions. Other segmental analysis as required by the Broadcasting Act 2009 is set out in note 2(e).

In note 2(d), commercial revenues are mainly reported in the Commercial division. 2rn revenues are reported in the Network division. Archive and library sales revenues are reported in the Content division. Revenues from the provision of multiplexing services and some other minor revenues are reported under other segments. The reporting of licence fee revenue within each division is a function of the licence fee attributed to each individual channel and service.

Costs directly incurred by and for a division are reported within that division. An appropriate full-cost absorption/usage allocation basis is used to apply a fair and reasonable cost to inter-divisional and central shared services consumed by those divisions. The allocations are based upon consistently applied and objectively justifiable cost accounting principles.

Costs of production, commissioning and acquisition of television and radio programmes are incurred primarily for the purpose of providing RTÉ’s free-to-air television and radio channels. These costs are charged to the Content and News & Current Affairs divisions as appropriate. In order to fairly reflect the true cost of providing RTÉ’s free-to-air television and radio channels, these costs are not apportioned to the online services where further opportunities to access the content are provided. Where direct costs are incurred in the acquisition of online rights, the repurposing of content or the creation of content primarily for online, these are charged to online services. RTÉ is increasing its non-linear output with more programmes getting first transmission on digital platforms and a move towards a digital-first approach in news coverage. Reflecting this digital-first strategy, online services are allocated an appropriate proportion of the cost of common news-gathering infrastructure. Where content is both sourced for inclusion in broadcast programmes and used directly in online services, the cost of sourcing such content is allocated in line with the cost allocation principles set out above.

(d) Programme inventories

Programme inventories are valued at the lower of cost and net realisable value.

Indigenous programme inventories are programmes produced in-house by RTÉ or programmes commissioned by RTÉ from independent producers. Costs for in-house programme stock include direct programme costs, including production facilities and programme labour costs. Costs for commissioned programme stocks are based on the contract price. Indigenous programme inventories are charged to the Income Statement in full on first transmission.

Acquired programme inventories are programmes and films purchased by RTÉ from third-party studios and broadcasters. Costs for acquired programme inventories are defined as the third-party licence contract price which RTÉ pays the studio or broadcaster. Acquired programme inventories are charged to the Income Statement based on the expected value of each transmission as follows:


75% on first transmission

25% on second transmission


99% on first transmission

1% on second transmission

Sports rights inventories are the rights to broadcast sporting events. Costs for sports rights inventories are defined as the contract price agreed by the Group with the relevant sports body or rights holder. Where RTÉ sublicenses sports rights to third parties, the associated income and costs are reflected on a net basis in the Income Statement. Sports rights inventories are charged to the Income Statement as the sporting events relating to the rights are broadcast.