FINANCIAL REPORT (cont.) Notes to the Financial Statements (cont.)
10. CONTRACT ASSETS AND CONTRACT LIABILITIES
2023 $’000
2022 $’000 9,340
Contract assets related to contracts Contract liabilities relating to contracts
33,145 11,174
13,023
Contract assets Contract assets are balances due from customers under long-term contracts as work is performed and therefore a contract asset is recognised over the period in which the performance obligation is fulfilled. This represents the Group’s right to consideration for the services transferred to date. Amounts are generally reclassified to accounts receivable when these have been invoiced to a customer. Contract liabilities Contract liabilities relating to construction contracts are balances due to customers under construction contracts. These arise if a particular milestone payment exceeds the revenue recognised to date under the percentage cost complete method. Revenue recognised in the reporting period that was included in the contract liability balance at the beginning of the period was $13.023 million (2022: $5.68 million). Revenue recognised in the reporting period from performance obligations satisfied or partially satisfied in previous periods was nil (2022: nil). Partially satisfied performance obligations continue to incur revenue and costs in the period. Remaining performance obligations (Work in hand) Contracts which have remaining performance obligations as at 30 June 2023 and 30 June 2022 are set out below.
2023 $’000
2022 $’000
Revenue stream
Engineering & Construction
58,672 78,868 21,601 159,141
127,941 17,981 46,973
Services
Fabrication & Construction
Total work in hand 192,895 Contracts in the different sectors have different lengths. The average duration of contracts is 12 – 24 months, however some contracts will vary from these typical lengths. Revenue is typically earned over these varying timeframes, however more of the revenue noted above is expected to be earned within 12 months. 11. PROVISIONS 2023 $’000 2022 $’000 Current Employee benefits 3,287 2,155 Warranty and maintenance provisions 3,600 2,272 Total current provisions 6,887 4,427 Non-current Employee benefits 809 782 Other provisions - 57 Total Non-current provisions 809 839
Annual Report 2023 75
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