Rogers Communications Inc. is a diversified Canadian communications and media company engaged in three primary lines of business: Wireless, Cable, and Media. The following is part of Rogers' revenue recognition policy note in its 2017 financial statements:

ROGERS COMMUNICATIONS INC.

Notes to the Financial Statements

December 31, 2017

NOTE 5: REVENUE

ACCOUNTING POLICY

Revenue Recognition

We recognize revenue when we can estimate its amount, have delivered on our obligations within the revenue-generating arrangements, and are reasonably assured that we can collect it. Revenue is recognized net of discounts.

Source of revenue	How we recognize revenue
Monthly subscriber fees for: wireless airtime and data services; cable, telephony, and Internet services; network services; media subscriptions; and rental of equipment	As the service is provided
Revenue from roaming, long distance, pay per use, and other optional or non-subscription services and other sales of products	As the service is provided or product is delivered
Revenue from the sale of wireless and cable equipment	When the equipment is delivered and accepted by the independent dealer or subscriber in a direct sales channel
Equipment subsidies related to providing equipment to new and existing subscribers	Equipment subsidies are recognized as a reduction of equipment revenue when the equipment is activated
Activation fees charged to subscribers in Wireless	As part of service revenue upon activation of the equipment These fees do not meet the criteria as a separate unit of accounting
Advertising revenue	When the advertising airs on our radio or television stations, is featured in our publications, or displayed on our digital properties
Monthly subscription revenue received by television stations for subscriptions from cable and satellite providers	When the services are delivered to cable and satellite providers' subscribers
Toronto Blue Jays revenue from home game admission and concessions	When the related games are played during the baseball season and when goods are sold
Toronto Blue Jays revenue from Major League Baseball, including fund redistribution and other distributions.	When the amount can be determined
Revenue from Toronto Blue Jays, radio, and television broadcast agreements	At the time the related games are aired
Revenue from sublicensing of program rights	Over the course of the applicable season
Rewards granted to customers through customer loyalty programs, which are considered a separately identifiable component of the sales transactions	Estimate the portion of the original sales transaction to allocate to the reward credit based on the fair value of the reward credit that can be obtained when the credit is redeemed Defer the allocated amount as a liability until the rewards are redeemed by the customer and we provide the goods or services
Interest income on credit card receivables	As it is earned (i.e. upon the passage of time) using the effective interest method

Multiple Deliverable Arrangements

We offer some products and services as part of multiple deliverable arrangements. We recognize these as follows:

• divide the products and services into separate units of accounting, as long as the delivered elements have stand-alone value to customers and we can determine the fair value of any undelivered elements objectively and reliably; then
• measure and allocate the arrangement consideration among the accounting units based on their relative fair values and recognize revenue related to each unit when the relevant criteria are met for each unit individually; however
• when an amount allocated to a delivered item is contingent upon the delivery of additional items or meeting specified performance conditions, the amount allocated to the delivered item is limited to the non-contingent amount, as applicable.

Unearned Revenue

We recognize payments we receive in advance of providing goods and services as unearned revenue. Advance payments include subscriber deposits, cable installation fees, ticket deposits related to Toronto Blue Jays ticket sales, and amounts subscribers pay for services and subscriptions that will be provided in future periods.

EXPLANATORY INFORMATION

	Years ended December 31
(In millions of dollars)	2017	2016
Wireless:
Service revenue	7,775	7,258
Equipment sales	568	658
Total Wireless	8,343	7,916
Cable:
Internet	1,606	1,495
Television	1,501	1,562
Phone	353	386
Service revenue	3,460	3,443
Equipment sales	6	6
Total Cable	3,466	3,449
Business Solutions:
Next generation	322	307
Legacy	58	71
Service revenue	380	378
Equipment sales	7	6
Total Business Solutions	387	384
Media:
Advertising	838	870
Subscription	511	474
Retail	352	325
Other	452	477
Total Media	2,153	2,146
Corporate items and intercompany eliminations	(206)	(193)
Total revenue	14,143	13,702

Rogers' balance sheet included a current liability of $346 million at December 31, 2017, called Unearned Revenue. Unearned revenue includes subscriber deposits, cable installation fees, and amounts received from subscribers related to services and subscriptions to be provided in future periods.

Instructions

a. When does Rogers recognize its revenue from monthly subscriber fees?

b. When should Rogers record unearned revenue from its subscription services? When should it record unearned revenue for its Blue Jays home game admission revenue?

c. If Rogers (inappropriately) recorded these unearned revenues as revenue when the cash was received in advance, what would be the effect on the company's financial position? (Use the basic accounting equation and explain what elements would be overstated or understated.)