22 Contract liabilities – deferred revenue Deferred revenue represents advanced consideration received from customers, for which revenue is recognised over time. Deferred revenue is analysed as follows and is considered a contract liability:
Group 2021 £m
Group 2020 £m
Analysed as follows: Current
43.6
39.5
0.7
Non-current
1.4
44.3
40.9
Revenue recognised in the year ended 31 May 2021 that was included in the contract liability at 1 June 2020 amounted to £39.5m (2020: £35.3m). The Group has taken advantage of the IFRS 15 practical expedient not to disclose when revenue will unwind for all contracts less than 12 months in length. The increase in deferred revenue in the year is due to the growth of the Assurance division.
23 Contract balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.
Group 2021 £m 35.2 22.9
Group 2020 £m 41.6 18.0
Note
Receivables, which are included in trade and other receivables
17 17 17 17 22
Contract assets – accrued income Contract costs – costs to obtain
0.4
0.4 2.1
–
Contract costs – costs to fulfil an onerous contract
(44.3)
Contract liabilities – deferred income
(40.9)
Receivables represent invoiced services usually payable within 30 days whereby performance obligations have been satisfied. Accrued income represents the Group’s rights to consideration for work completed but not billed at the reporting date. Remaining balances are transferred to receivables when the rights become unconditional. Credit losses of £0.1m (2020: £nil) have been recognised in respect of contract assets. The increase in accrued income in the year is due to the growth of the Assurance division. The contract assets were not impacted by any impairment charge. The contract assets are transferred to receivables when the rights become unconditional. This usually occurs when the Group issues an invoice to the customer. Invoices usually become payable within 30 days. The contract costs to obtain of £0.4m (2020: £0.4m) represent incremental sales commissions to obtain specific contracts. The contract costs to fulfil represent recoverable costs relating to future performance obligations and economic benefits to the customer in relation to a long-term onerous contract. Contract liabilities primarily relate to advanced consideration received from customers, for which revenue is recognised over time in line with the respective performance obligation. No information is provided about remaining performance obligations at 31 May 2021 or at 31 May 2020 that have an original expected duration of one year or less, as allowed by IFRS 15.
NCC Group plc — Annual report and accounts for the year ended 31 May 2021
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