2. 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.

(a) 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 Social Protection (DSP) on behalf of individuals eligible for a “free” television licence. This revenue is paid monthly by the DSP 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 DSP, together with the amounts collected by An Post, net of collection costs, a 7% levy to the Broadcasting Fund and amounts paid to TG4 as determined by the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media.

Licence fee revenue payable by the DSP 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.

(b) 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.

(c) 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.

(d) 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.

(e) 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.