3. Significant accounting policies (continued):

(i) Revenue (continued):

Revenue from distribution of water - revenue attributable to the delivery of water is based upon Commission approved distribution rates and includes the amounts billed to customers for connection and consumption. Revenue is recognized as water is delivered and consumed by customers. Revenue includes an estimate of unbilled revenue. Unbilled revenue represents an estimate of water consumed by customers since the date of each customer's last meter reading. Actual water usage could differ from those estimates.

Revenue from District Energy – the Commission operates a district energy system where commercial heating and cooling services are provided to customers. Revenue is recognized when the heating and cooling has been provided to the customers.

Other income – work performed is recorded on a net basis as the Commission is acting as an agent for this revenue stream. All other amounts in other income are recorded on a gross basis and are recognized when services are rendered.

(j) Finance income and finance costs:

Finance income is recognized as it accrues in the statement of income, using the effective interest method.

Finance costs comprise interest expense on borrowings and amortizing of the discount rate on provisions.

(k) Set-off and reporting on a net basis:

Assets and liabilities and income and expenses are not offset and reported on a net basis unless required or permitted by IFRS. For financial assets and financial liabilities, offsetting is permitted when, and only when, the Commission has a legally enforceable right to set-off and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.