1 Accounting policies
Basis of preparation
Swisscom operates in business areas where the provision of services is not subject to any major seasonal or cyclical fluctuations during the financial year. Income taxes are calculated on the basis of an estimate of the expected income tax rate for the full year. For the consolidated interim financialstatements, a CHF/EUR exchange rate of 1.093 was used as the end-of-period rate (31 December 2016: CHF/EUR 1.074) and 1.077 as the average rate for the period (prior year: CHF/EUR 1.096).
Changes in accounting principles
- For multi-component contracts (mobile subscription with subsidised mobile device) revenue must be reallocated to the already delivered components (mobile device) meaning that revenue is recognised earlier. Revenue amount remains unchanged over the contractual term.
- Commission paid to retailers (costs of obtaining a contract) as well as costs for routers and set-top boxes (costs to fulfill a contract) are capitalised and recognised as expenses over the contractual term.
See Note 3.22 of the 2016 consolidated financial statements for further information on the changes in the International Financial Reporting Standards and interpretations that must be applied from financial year 2018 or later.