Revenue is recognised if the Group has entered into a contract with a customer in which it can identify each party’s rights regarding the goods or services to be transferred, where payment terms can be identified and the contract has commercial substance. . It must also be probable that the Group will collect the consideration to which it is entitled. Revenue is recognised per individual contract. Revenue from portfolios of contracts with similar features is recognised on a portfolio basis if the result is not materially different from the revenue measured on an individual contract basis.
If a contract involves several performance obligations, revenue is separately attributed to the performance obligations concerned based on the relative stand-alone selling prices. Revenue is recognised when or as the customer obtains control over a promised good or service.
Variable consideration is only recognised if it is highly probable that a significant revenue reversal will not occur when the uncertainty associated with the variable consideration is subsequently resolved:
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Revenue from additional work is included in the total contract revenue if the client has accepted the amount involved in any way.
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Revenue from claims and incentives is included in the total contract revenue to the extent that these derive from enforceable rights, it is highly probable that they will result in revenue and can be measured reliably.
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Insofar as it is not highly probable that a penalty will not be levied, the expected amount of any penalties will be deducted from the total revenue.
If the results from a contract cannot be reasonably measured, the revenue is only recognised insofar as it is probable that the costs incurred can be covered by revenue.
If a contract contains a significant financing component, the Group adjusts the transaction price accordingly, except if the time between the fulfilment of the performance obligation and the payment of the consideration is less than one year.
Expected contract losses are recognised immediately in the statement of profit or loss. In determining the amount of such loss provisions, the Group proceeds on the basis of the economic benefits expected to be received compared with the attributable costs of the contract.
(5a) Revenue from the sale of goods - mainly land
Revenue from the sale of goods - mainly land - is recognised at the agreed consideration or attributed consideration (for instance, when the transfer of title to the land forms part of a combined purchase/construction contract in the case of residential projects). The revenue from the land is recognised at the time of legal conveyance.
(5b) Work in progress – projects
The revenue relating to work in progress is recognised in the statement of profit or loss when control is transferred to the client. Since the Group executes projects on land owned by the client, the client obtains control by accession according to progress made in completion of the project. For all project activities - with the exception of a few specific activities in the Living segment, as explained below - the progress of the attributable result is determined on the basis of the proportion of costs recorded in relation to the total expected costs (cost-to-come) to the extent that the costs incurred are representative of the progress made in the transfer of goods/services to the client. This takes in to account any unsold units. Inefficiencies are disregarded in determining the stage of completion.
In addition, in the case of property development activities, the stage of completion is determined in proportion to the total invoiced instalments (per individual project). The same applies to construction work insofar as there are split purchase/construction contracts in which case the group invoices strictly on the basis of progress according to established milestones. If the invoicing does not form a good basis for the measurement of progress (for example if the full invoice is sent upon delivery), the progress will be measured in accordance with the first paragraph and the revenues will be recognised on this basis.
(5c) Services
Revenue from the provision of services, mainly servicing and maintenance activities, is recognised in the statement of profit or loss in proportion to the work performed, since the client receives the benefits from and has use of the services at the same rate. The stage of completion is determined from assessments of the work already carried out.