Helsinki, 2017-01-24 09:13 CET (GLOBE NEWSWIRE) -- Posti Group Corporation has changed its reportable segments as well as its revenue recognition principles for prepaid services effective from the fourth quarter of 2016.
Changes to segment reporting
The Postal Services operating segment and the Parcel and Logistics Services operating segment have been aggregated into a single reportable segment called Mail, Parcel and Logistics Services. Starting from the last quarter of 2016, the company reports its results of operations for the following reportable segments: Mail, Parcel and Logistics Services; Itella Russia; and OpusCapita. In addition, the company will report net sales for the following business areas under the Mail, Parcel and Logistics Services segment: mail and marketing services, parcel services, press services and logistics services. Going forward, Posti will also report new financial indicators: EBITDA and Adjusted EBITDA.
The new reportable segment for the most part shares common operative functions, such as production, the retail network and customer service. These functions represent the majority of the combined segment's expenses. The aggregated operating segments are similar in terms of their financial characteristics, services, production processes, customers and distribution channels.
In conjunction with the change in reportable segments, the Group has also changed its principles for the allocation of Group's support functions to the businesses. More costs of support functions have now been allocated to the businesses and reportable segments.
Change in the revenue recognition principle for stamps
As part of the adoption process of the new IFRS revenue recognition standard, Posti has changed the Group's revenue recognition principle for stamps and other prepaid services. Under the new revenue recognition principle, the Group will recognize revenue for prepaid services, including stamps, franking machines and prepaid envelopes, based on their estimated usage. Previously, revenue from these prepaid services has been recognized at the point of customer purchase.
The estimated usage is based on a statistical model that incorporates historical sales and usage volumes as well as price changes. The services to be performed after the reporting date are accrued as deferred revenue liability on the balance sheet. The deferred revenue liability is presented on the balance sheet as current and non-current.
The impacts of the change in the revenue recognition principle on the consolidated income statements, balance sheets and cash flow statements, the adjusted segment-specific financial information and the key figures for the years 2014-2015 and Q1-Q3/2016 are presented as an attachment to this release in accordance with the provisions of IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors". The changes are presented retrospectively starting from January 1, 2014 to increase longer term comparability.
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Posti Group is your first choice in postal, logistics and e-commerce services. We manage the flow of commerce and everyday life in 10 countries. Our net sales in 2015 amounted to EUR 1,650 million. We employ approximately 22,000 professionals who serve our customers in Finland under the name Posti and in other countries under the name Itella. All our services in Finland are carbon neutral. www.posti.com.Posti-Group-Restated-financial-information-2014-Q32016.pdf