In the direct distribution channel, the Group recognises revenue from device financing arrangements as equipment revenue on the date that risks and rewards of ownership of the devices are transferred to the end customer. This is because the Group is acting as principal in the supply of the handset and the provision of services

In the indirect channel, the Group applied similar accounting, and recognised equipment revenue from finance deals in the indirect distribution channel on a gross basis with the corresponding cost indirect expenses. This accounting treatment has been revisited since, in the indirect channel, the Group is not responsible for transferring the handset to the customer and is therefore financing the acquisition of the handset by the customer. As a result, the Group has restated its consolidated income statement to reflect only the finance income on these transactions as revenue. This resulted in a decrease in equipment revenue and a corresponding decrease in direct expenses in the current and previous financial years. There was no impact on earnings or earnings per share. The amount of the correction for the 2015 financial year was as follows:

In both the direct and indirect channel, the Group has a contractual right to cash in respect of device financing that is not contingent on the delivery of future services, and the Group therefore continues to present such amounts as ‘finance receivables’ in the consolidated statement of financial position. The restatement has no impact on the consolidated statement of financial position.