Friends, help me out....

A. Revenue Recognition,
At what point does Safaricom recognize revenue for pre-paid?

1. Cards are shipped out to resellers/distributors or numbers/code generated at POS or other,

2. When Cards are "activated" by loading credit onto 'SIM' or other,

3. When credit is consumed e.g voice, data, sending SMS, credit expires or other,

B. Loyalty Programmes
How does Safaricom account for Bonga points: 1 point = 0.50 ....where do these appear on financial statements? Special line item?

C. MPESA
Where does money held in the system (pending transaction or "saved") e.g. MPESA agent's float appear on Financial statements?

Thanks..

@drake...see the summary of IFRIC 13 BELOW.

IFRIC 13 addresses accounting by entities that grant loyalty award credits (such as 'points' or travel miles) to customers who buy other goods or services. Specifically, it explains how such entities should account for their obligations to provide free or discounted goods or services ('awards') to customers who redeem award credits.
Key Provisions

An entity that grants loyalty award credits shall allocate some of the proceeds of the initial sale to the award credits as a liability (its obligation to provide the awards). In effect, the award is accounted for as a separate component of the sale transaction.
The amount of proceeds allocated to the award credits is measured by reference to their fair value, that is, the amount for which the award credits could have been sold separately.
The entity shall recognise the deferred portion of the proceeds as revenue only when it has fulfilled its obligations. It may fulfil its obligations either by supplying the awards itself or by engaging (and paying) a third party to do so.
If at any time the expected costs of meeting the obligation exceed the consideration received, the entity has an onerous contract for which IAS 37 would require recognition of a liability.
If IFRIC 13 causes an entity to change its accounting policy for customer loyalty awards, IAS 8 applies.
Effective Date

IFRIC 13 is effective for annual periods beginning on or after 1 July 2008. Earlier application is permitted.

safaricom 2.0 is about to rev and am sure it will silence most of doubting toms.These are the areas I think they will concentrate on in the coming FY

1.Jamii telkom-safaricom partnership is going to give AK and other ISPs Run for their money if safaricom business offers are anything to go by.

2.Acquisition interms of smart phones, laptops and collaboration like the one we witnessed btwn safaricom and Kenya bankers will drive the data revenue to the next level.

3.Voice is the tricky part to increase minute of usage they may introduce discounted bundles or tarrifs that lock consumers into the network I think they may introduce contract based tariffs with Kabambe offered for free to encourage more users join the network.

4.The sms segment is going to grow exponentially due to its link to social media I think Twitter and facebook addicts find this service heaven sent.

5.Livestreaming their result just showed us how safaricom is demonstrating its capacity in offering real time broadcasting this is jewel if well packaged can be used for live transmission of events cost effectively.

6.Mpesa revolution might surprise us by becoming a stand alone product that might link several banks by being an agent for all banks.

This company offer immense possibilities going forward Airtel will offer a challenge that will help safaricom grow even bigger since it will be kept on its toes by rene meza.

Selah and Barrywhite. Good analysis of where the growth in Safcom'a profits may be expected to come from. As indicated elsewhere, I was pretty impressed by SCOM's topline results but somewhat jaded by the BOTTOMLINE. The company has definitely shown that it is indeed RESILIENT.

All the same, I have pointed out that profits have demonstrated a declining trend in the last 6 quarters. We need to see this trend change direction before we can be convinced that SCOM will not just be another company but what many people had hoped when it first listed - A GROWTH COMPANY both in terms of profits and share price.

Remember SCOM is competing for our Investment Shs or $ against a basket of other companies some of which are still reporting growth in profits in excess of 50% per annum.

Clearly, the market is not that impressed with the results.