Notes to the financial statements (cont’d) For the year ended 30 June 2012 (ii) Onerous contracts (k) Contract classification (i) Insurance contracts (l) Revenue (i) Management and service fees revenue (ii) Other fee revenue and stockbroking revenue (ii) Investment contracts (iv) Premium revenue (iii) Upfront service fees A provision for onerous contracts is recognised when the  expected benefits to be derived by the Group from a contract  are lower than the unavoidable cost of meeting its obligations  under the contract. The provision is measured at the present  value of the lower of the expected cost of terminating the  contract and the expected net cost of continuing with  the contract. Before a provision is established, the Group  recognises any impairment loss on the assets associated with  that contract. investment contract liability. Distributions on these contracts  are charged to profit or loss as an expense. Where contracts contain both an investment component and  an insurance component and the deposit component can be  separately measured, the underlying amounts are unbundled.  Premiums relating to the insurance component are accounted  for through profit or loss and the investment component is  accounted for as a deposit through the statement of financial  position as described above. Revenue is measured at the fair value of the consideration  received or receivable.  The accounting treatment of certain transactions varies  depending on the nature of the contract underlying the  transaction. The major contract classifications are insurance  contracts and investment contracts. Insurance contracts are those containing significant insurance  risk at the inception of the contract, or those where at the  inception of the contract there is a scenario with commercial  substance where the level of insurance risk may be significant.  The significance of insurance risk is dependent on both the  probability of an insured event and the magnitude of its  potential effect. Once a contract has been classified as an insurance contract, it  remains an insurance contract for the remainder of its lifetime,  even if the insurance risk reduces significantly during the  period. The Group provide management services to unit trusts and  funds operated by the Group at normal commercial rates.  Management and service fees earned from the unit trusts  and funds are calculated based on an agreed percentage of  the respective funds under management or administration as  disclosed in the respective product disclosure statements, and  are recognised on an accruals basis. Management and service fees revenue from the provision of  financial advisory services together with revenue from the  rendering of services are recognised at the time the service is  provided. Contracts not considered insurance contracts are classified  as investment contracts. The accounting treatment of  investment contracts depends on whether the investment has  a discretionary participation feature (‘DPF’). A DPF represents  a contractual right to receive, as a supplement to guaranteed  benefits, additional benefits that are: Other fee revenue and stockbroking revenue from the  rendering of services are recognised at the time the service is  provided. Upfront service fees are recorded as deferred revenue and  recognised on a straight-line basis over a period that is  reflective of the continued service provided. The period of  amortisation is based on historical experience and varies  between products on offer. The current deferral period is  between 5 and 7 years. These upfront service fees are recorded  as a deferred revenue liability within other liabilities in the  consolidated statement of financial position. Premium revenue is earned on life insurance products. Life  insurance premiums with no due date are recognised on a  cash received basis. Premiums with regular due dates are  recognised as revenue on a basis which is consistent with  the Actuary’s valuation of liabilities. Deposit components of  life insurance contracts are not revenue and are treated as  movements in life insurance contract liabilities. Deposits collected and benefits paid under investment  contracts with DPF are accounted for through profit or loss.  The gross change in the liability to these policyholders for  the period, which includes any participating benefits vested  in policyholders and any undistributed surplus attributed to  policyholders, is also recognised in profit or loss. Deposits collected and withdrawals processed for investment  contracts without DPF are accounted for directly through  the statement of financial position as a movement in the  page 68 •  likely to be a significant portion of the total benefits; •  distributed at the discretion of the insurer; and •  are based on the performance of a specified pool of assets.