REG - Accesso Technology - Preliminary Statement <Origin Href="QuoteRef">ACSO.L</Origin> <Origin Href="QuoteRef">CIU.L</Origin> - Part 2

accesso TechnologyAnnouncement

18/03/2015 07:11

- Part 2: For the preceding part double click  ID:nRSR7186Ha 

have a
significant impact on the group's financial results, apart from additional
disclosures. 
 
Basis of accounting 
 
The financial information has been prepared under the historical cost
convention. 
 
The preparation of this financial information in conformity with IFRS requires
the use of certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the accounting policies.
The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial information are
noted below. 
 
Critical estimates and judgements 
 
The group makes judgements and assumptions concerning the future that impact
the application of policies and reported amounts. The resulting accounting
estimates calculated using these judgements and assumptions may not equal the
related actual results but are based on historical experience and expectations
of future events. The judgements and key sources of estimation uncertainty
that have a significant effect on the amounts recognised in the financial
information are discussed below. 
 
Impairment of assets 
 
Financial and non-financial assets including other intangibles are subject to
impairment reviews based on whether current or future events and circumstances
suggest that their recoverable amount may be less than their carrying value.
Recoverable amount is based on a calculation of expected future cash flows
which includes management assumptions and estimates of future performance. 
 
If there is an indication that impairment exists, the recoverable amount of
the asset is estimated in order to determine the extent of the impairment loss
(if any). Where the asset does not generate cash flows that are independent
from other assets, the group estimates the recoverable amount of the
cash-generating unit to which this asset belongs. An intangible asset with an
indefinite useful life is tested for impairment annually and whenever there is
an indication that the asset may be impaired. 
 
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 pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific
to the asset for which the estimates of the 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
(cash-generating unit) is reduced to its recoverable amount. An impairment
loss is recognised as an expense immediately, unless the relevant asset is
carried at a re-valued amount, in which case the impairment loss is treated as
a revaluation decrease. 
 
Where an impairment loss subsequently reverses, the carrying amount of the
asset (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 recognised for the asset (cash-generating unit) in prior periods. A
reversal of an impairment loss is recognised as income immediately unless the
relevant asset is carried at a re-valued amount, in which case the reversal of
the impairment loss is treated as a revaluation increase. 
 
Impairment of non-financial assets (excluding inventories and deferred tax
assets) 
 
Impairment tests on goodwill and other intangible assets with indefinite
useful economic lives are undertaken annually at the financial year end. Other
non-financial assets are subject to impairment tests whenever events or
changes in circumstances indicate that their carrying amount may not be
recoverable. Where the carrying value of an asset exceeds its recoverable
amount (i.e. the higher of value in use and fair value less costs to sell),
the asset is written down accordingly. 
 
Where it is not possible to estimate the recoverable amount of an individual
asset, the impairment test is carried out on the smallest group of assets to
which it belongs for which there are separately identifiable cash flows; its
cash generating units ('CGUs'). Goodwill is allocated on initial recognition
to each of the group's CGUs that are expected to benefit from the synergies of
the combination giving rise to the goodwill. 
 
Impairment of non-financial assets (excluding inventories and deferred tax
assets) (continued) 
 
Impairment charges are included in profit or loss, except to the extent they
reverse gains previously recognised in other comprehensive income. An
impairment loss recognised for goodwill is not reversed. 
 
Useful lives of intangible assets 
 
Intangible assets are amortised over their estimated useful lives.  Useful
lives are based on the management's estimates of the period that the assets
will generate revenue, which are periodically reviewed for continued
appropriateness.  Changes to estimates can result in significant variations in
the carrying value and amounts charged to the consolidated income statement in
specific periods. 
 
Determination of fair values of intangible assets acquired in business
combinations 
 
The fair value of intangible assets acquired in business combinations is based
on a method appropriate to the specific intangible asset. The accesso, LLC.
intangible assets were derived as follows: 
 
o  Customer relationships on multiple period excess earnings; and 
 
o  Internally developed technology on an estimated cost to recreate the
intellectual property. 
 
Siriusware, Inc. and Visionone's intangible assets were derived as follows: 
 
o  Internally developed technology on a multiple period excess earnings
method; 
 
o  Customer relationships on a cost based approach; and 
 
o  Trademarks on a relief from royalty method. 
 
Income taxes 
 
The group is subject to income tax in several jurisdictions and significant
judgement is required in determining the provision for income taxes.  During
the ordinary course of business, there are transactions and calculations for
which the ultimate tax determination is uncertain.  As a result, the group
recognises tax liabilities based on estimates of whether additional taxes and
interest will be due.  The group believes that its accruals for tax
liabilities are adequate for all open audit years based on its assessment of
many factors including past experience and interpretations of tax law.  This
assessment relies on estimates and assumptions and may involve a series of
complex judgements about future events.  To the extent that the final tax
outcome of these matters is different than the amounts recorded, such
differences will impact income tax expense in the period in which such
determination is made. 
 
The recognition of deferred tax assets is based upon whether it is more likely
than not that sufficient and suitable taxable profits will be available in the
future against which the reversal of temporary differences can be deducted.
Where the temporary differences are related to losses, the availability of the
losses to offset against forecast taxable profits is also considered. 
 
Deferred tax arising on business combinations reflects the difference in tax
base and book base. The tax base of the intangible assets depends on the local
jurisdiction and the nature of the acquisition as to whether a stock or asset
purchase. 
 
Research and development tax credit 
 
Research and development tax credits are recognised on an accruals basis and
are included as an income tax credit under current assets. The group has
history of successfully estimating research and development tax credits as set
out by applicable tax legislation. 
 
Basis of consolidation 
 
The consolidated financial information incorporates the results of accesso and
all of its subsidiary undertakings as at 31 December 2014 using the
acquisition method of accounting. The results of subsidiary undertakings are
included from the date of acquisition. 
 
Where necessary, adjustments are made to the financial information of
subsidiaries to bring the accounting policies used in line with those used by
the group. 
 
All intra-group transactions, balances, income and expenses are eliminated on
consolidation. 
 
Lo-Q (Trustees) Limited, a subsidiary company that holds an employee benefit
trust on behalf of accesso Technology Group plc is under control of the board
of directors and hence has been consolidated into the group results. 
 
The acquisition of subsidiaries is accounted for using the purchase method.
The cost of the acquisition is measured at the aggregate of the fair value, at
the date of exchange, of assets given, liabilities incurred or assumed and
equity instruments issued by the group in exchange for control of the
acquiree. Any costs directly attributable to the business combination are
written off to the group income statement. The acquiree's identifiable assets,
liabilities and contingent liabilities that meet the conditions under IFRS3
are recognised at their fair value at the acquisition date. 
 
Goodwill arising on acquisition is recognised as an asset and initially
measured at cost, being the excess of the cost of the business combination
over the group's interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities recognised. 
 
Subsidiaries 
 
Subsidiaries are all entities over which the group has the power to govern the
financial and operating policies generally accompanying a shareholding of more
than half of the voting rights. The results of subsidiaries are included in
the group income statement from the date of acquisition. 
 
Investments including the shares in subsidiary companies held as fixed assets
are stated at cost less any provision for impairment in value. In relation to
acquisitions, where advantage can be taken of the merger relief rules, shares
issued as consideration for acquisitions are accounted for a nominal value 
 
Change in presentation currency 
 
The Directors decided that effective 1 January 2014 the Group's presentation
currency should be USD, which more closely aligns with the global operations
of the group. Comparative information has been restated in USD in accordance
with the guidance in IAS 21. The 14 month period ended 31 December 2013
numbers and associated notes and the balance sheet at 4 November 2012 have
been retranslated from GBP to USD using the procedures outlined below: 
 
o  assets and liabilities were translated into USD at closing rates of
exchange; 
 
o  income and expenses were translated into USD at monthly rates of exchange
as they are a suitable proxy for the prevailing rates at the date of
transactions; 
 
o  differences resulting from the retranslation on the opening net assets and
the results for the period have been taken to Other Comprehensive Income; and 
 
o  the group has chosen to translate share capital, share premium and other
reserves at closing rates in line with IAS21, any differences arising have
been recorded as cumulative translation adjustments and recorded direct to
translation reserves. 
 
Revenue recognition 
 
Revenue primarily arises from the development and application of virtual
queuing technologies and the rental of such technology by theme park, water
park or attraction guests, eCommerce ticketing and the sale of point of sale
hardware and software. 
 
Revenue, in relation to virtual queuing, represents either total rentals, net
of sales taxes, to theme park, water park or attraction guests, where the
group is responsible for the operation within the park or attraction, or the
group's share of such rental. Where total revenue is accounted for, the park
operators share of such rental is included within cost of sales. 
 
Ticketing revenue is recognised on a transactional basis and point of sale
revenue is recognised on transfer of the goods or services 
 
Revenue also includes, where applicable, revenue from the sale of an installed
system to a new or existing park operator, which is recognised on delivery of
the system. 
 
Interest expense recognition 
 
Expense is recognised as interest accrues, using the effective interest
method, to the net carrying amount of the financial liability. 
 
Employee expenses 
 
The group issues equity-settled share-based payments to full time employees.
Equity settled share-based payments are measured at the fair value at the date
of grant. The fair value determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line basis over the vesting
period, based on the group's estimate of shares that will eventually vest. 
 
The fair value of EMI and unapproved share options is measured by use of a
Black-Scholes model, share options issued under the Long Term Incentive Plan
('LTIP') are measured using the Monte Carlo method due to the market based
conditions upon which vesting is dependent. The expected life used in the
model has been adjusted, based on management's best estimate, for the effects
of non-transferability, exercise restrictions, and behavioural
considerations. 
 
The LTIP awards contain market based vesting conditions. Market vesting
conditions are factored into the fair value of the options granted. As long as
all other vesting conditions are satisfied, a charge is made irrespective of
whether the market vesting conditions are satisfied. The cumulative expense is
not adjusted for failure to achieve a market vesting condition or where a
non-vesting condition is not satisfied. 
 
Commitments under operating leases 
 
Where substantially all of the risks and rewards incidental to ownership are
not transferred to the group (an "operating lease"), the total rentals payable
under the lease are charged to the consolidated statement of comprehensive
income on a straight-line basis over the lease term. The aggregate benefit of
lease incentives is recognised as a reduction of the rental expense over the
lease term on a straight-line basis. 
 
Leased assets 
 
Where substantially all of the risks and rewards incidental to ownership of a
leased asset have been transferred to the Group (a "finance lease"), the asset
is treated as if it had been purchased outright. The amount initially
recognised as an asset is the lower of the fair value of the leased property
and the present value of the minimum lease payments payable over the term of
the lease. The corresponding lease commitment is shown as a liability. 
 
Lease payments are analysed between capital and interest. The interest element
is charged to the consolidated statement of comprehensive income over the
period of the lease and is calculated so that it represents a constant
proportion of the lease liability. The capital element reduces the balance
owed to the lessor. 
 
Property, plant and equipment 
 
Items of property, plant and equipment are stated at cost of acquisition or
production cost less accumulated depreciation and impairment losses. 
 
Depreciation is charged so as to write off the cost of assets over their
estimated useful lives, using the straight-line method, on the following
bases: 
 
 Plant and machinery     33.3%                                        
 Office equipment        33.3%                                        
 Installed systems       25-33.3% or seasons within life of contract  
 Furniture and fixtures  20.0%                                        
 
 
For installed systems the depreciation is charged over a season of operation
as this directly reflects the period of operation of the assets in which
economic benefits are generated. 
 
Inventories 
 
Stocks are valued at the lower of cost and net realisable value, after making
due allowance for obsolete and slow moving items. Stocks are calculated on a
first in first out basis. 
 
Park installations are valued on the basis of the cost of stock items and
labour plus attributable overheads. 
 
Net realisable value is based on estimated selling price less additional costs
to completion and disposal. 
 
Deferred tax 
 
Deferred tax assets and liabilities are recognised where the carrying amount
of an asset or liability in the consolidated statement of financial position
differs from its tax base, except for differences arising on: 
 
o  the initial recognition of goodwill; 
 
o  the initial recognition of an asset or liability in a transaction which is
not a business combination and at the time of the transaction affects neither
accounting or taxable profit; and 
 
o  investments in subsidiaries and jointly controlled entities where the group
is able to control the timing of the reversal of the difference and it is
probable that the difference will not reverse in the foreseeable future. 
 
Recognition of deferred tax assets is restricted to those instances where it
is probable that taxable profit will be available against which the difference
can be utilised. 
 
The amount of the asset or liability is determined using tax rates that have
been enacted or substantively enacted by the reporting date and are expected
to apply when the deferred tax liabilities/(assets) are settled/(recovered). 
 
Deferred tax assets and liabilities are offset when the group has a legally
enforceable right to offset current tax assets and liabilities and the
deferred tax assets and liabilities relate to taxes levied by the same tax
authority on either: 
 
o  the same taxable group company; or 
 
o  different group entities which intend either to settle current tax assets
and liabilities on a net basis, or to realise the assets and settle the
liabilities simultaneously, in each future period in which significant amounts
of deferred tax assets or liabilities are expected to be settled or
recovered. 
 
Current income tax 
 
The tax expense for the period comprises current and deferred tax. Tax is
recognised in the income statement, except to the extent that it relates to
items recognised in other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive income or directly in
equity, respectively. 
 
The current income tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the balance sheet date in the countries
where the company and its subsidiaries operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to interpretation.
It establishes provisions where appropriate on the basis of amounts expected
to be paid to the tax authorities. 
 
Goodwill a