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Revenue recognition
The Group’s core businesses include media business, content business and entertainment business. As a result, the Group has revenue from sales of various goods and services. The Group’s revenue amount is significant to the financial statements and directly affects its operating results, to which users of financial statements pay attention. I have therefore focused on the revenue recognition of the Group.
I have examined the revenue recognition of the Group by
• Assessing and testing the Group’s internal controls with respect to the revenue cycle by making enquiry of responsible executives, gaining an understanding of the controls and selecting representative samples to test the operation of the designed controls.
• On a sampling basis, examined supporting documents for actual sales and service transactions occurring during the year and near the end of the accounting period.
• Reviewed credit notes that the Group issued after the period-end.
• Performed analytical procedures on disaggregated data to detect possible irregularities in sales and service
transactions throughout the period, particularly for accounting entries made through journal vouchers.
Impairment of intangible assets and cost of spectrum license
As at 31 December 2016, the Group had intangible assets and cost of spectrum license totaling Baht 3,538 million, representing 66% of total assets, as discussed in Note 13 and 14 to the financial statements. The management’s assessment was that there were indicators of impairment of the intangible assets. Determining the impairment loss on such assets requires significant management judgement with respect to the projections of future operating performance and the assessment of future plans. The determination of key assumptions used to prepare the projections directly affects the amount of such impairment loss.
I gained an understaning of and assessed the key assumptions used for the preparation of business plans and the estimation of future cash inflows by gaining an understanding of the procedures undertaken to determine the assumptions, checking the assumptions against information from both internal and external sources, and comparing past cash flow projections to actual operating results in order to evaluate the exercise of management judgement in estimating the cash flow projections. I also evaluated the discount rate applied by the management through analysis of the finance costs of the Group and of the industry, tested the calculation of the realisable values of the assets using the selected financial model and considered the impact of changes in key assumptions on those realisable values, especially changes in the discount rate and long-term revenue growth rates. Moreover, I reviewed the disclosures made with respect to the impairment assessment for intangible assets and cost of spectrum license.
Impairment of investments in subsidiaries and loans to subsidiaries
As at 31 December 2016, the Company had investments in subsidiaries and loans to subsidiaries amounting to Baht 2,957 million and Baht 499 million, representing 70% and 12% of total assets. As discussed in Note 10 and 7 to the financial statements. The management’s assessment was that there were indicators of impairment of these investments in subsidiaries and loans to subsidiaries. In determining the impairment loss, the management had to
Annual Report 2016
Mono Technology Public Company Limited 127