Notes to the Financial Statements continued for the year ended 30 September 2025
1 Material accounting policies continued Revenue recognition continued Detailed policies continued
Timing of satisfaction of performance obligations and significant payment terms
Revenue recognition policies, including determination of transaction price and rationale
Revenue stream
Nature
Cyber Security continued
Technical Assurance Services (TAS) and Consulting and Implementation (C&I)
These revenue streams represent the Group’s core consulting services, delivered by consultants providing Cyber Security services to customers either over time or based on specific deliverables. Namely: • TAS provides proactive defence of digital assets through vulnerability assessments, penetration testing, adversary simulation, training, third party assurance and ongoing security monitoring. • C&I services deliver collaboration to assess security needs, develop tailored strategies, and execute solutions that strengthen organisational security posture and protect critical assets from potential threats. Contracts with multiple services identify each as a separate performance obligation, and the transaction price allocated to each of these is determined using a fixed contract rate based upon day rates, being the relative standalone selling price basis. Each revenue stream (TAS and C&I) can include the following product types: • Annuity contracts performed over a fixed contract period • Fixed price contracts based • Time and materials contracts based on actual days incurred and agreed day rates In certain situations the Group operates on agreed customer terms, which allow the Group to recover any abortive revenue from its customer in the event that a customer terminates a contract before the contract or deliverable is complete. This revenue represents the sale of own manufactured and/ or resale of third party products with no connection to other Group services. on a fixed contract value (derived from day rates)
For annuities, the customer simultaneously receives the benefits of the services provided by the Group over the contract term and one promise (performance obligation) is identified. The performance obligation is satisfied evenly over the length of the contract. For fixed price contracts, the customer simultaneously receives and consumes the benefits over time as services provided by the Group are delivered, and one performance obligation is identified. This is done according to the number of days worked, in comparison to the expected total number of days to fulfil the performance obligation. For time and materials contracts (based upon consultants’ time and expenses), the customer simultaneously receives the benefits of the services provided by the Group in the period over which the work is performed and one promise (performance obligation) is identified. Work is performed on a daily basis. For all product types referenced above, invoices are raised based on an agreed invoicing profile with the customer. Invoices are usually payable within 30 days. No material discounts or retrospective rebates are provided.
For annuities, revenue is recognised on a straight-line basis over the contract term, reflecting the continuous provision of security services. The customer receives benefits evenly over time. The transaction price is predetermined within the contract, based on its standalone selling price and spread evenly over the contract duration. For fixed price contracts, revenue is recognised over time based on an input method that measures progress towards fulfilling the performance obligation. This is calculated using the percentage of project days completed – comparing the number of days actually worked to the total estimated days required to satisfy the obligation. Since the work is performed daily (for example, conducting a security assessment of a customer’s environment), revenue recognition aligns with the ongoing daily effort. The transaction price is fixed upfront, based on agreed- upon day rates that reflect the standalone selling price. For time and materials contracts, revenue is recognised on an input basis by multiplying the actual days delivered by agreed daily rates. The customer benefits daily as services are performed. The transaction price varies with actual days worked and is based on day rates (defined by an in-house day rate sales pricing matrix), reflective of the standalone selling price. It is considered that, as the customer benefits over time based on consultants’ time, the input method faithfully depicts the Group’s performance towards complete satisfaction of the single performance obligation. Invoices in relation to any abortive revenue will be recognised when aborted.
Other services
The customer only benefits from the products on delivery. Invoices are raised based on an agreed invoicing profile with the customer. Invoices are usually payable within 30 days.
Revenue is recognised when control of the product is transferred to the customer. This occurs upon delivery under the contractual terms. On certain sales of third party products, the control of the product is considered to pass from the vendor to the end customer and in these cases the Group acts as an agent, and hence only records a commission on sale as opposed to gross revenue and costs of sale.
NCC Group plc — Annual report and accounts for the year ended 30 September 2025 118
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