Page 67 - Beeks Financial Cloud Group Annual Report 2021

Beeks Financial Cloud Group PLC
Notes to the Consolidated Financial Statements For the year ended 30 June 2021

of the business combination then combination includes a contingent 4. Allocating the transaction price
the excess is treated as goodwill. consideration arrangement, to the performance conditions
Where The Group’s assessment of the contingent consideration is 5. Recognising revenue when/
the net fair value of a subsidiary’s measured at its acquisition-date as performance obligation(s) are
net assets and liabilities exceeds fair value and included as part of satisfied.
the fair value of the consideration the consideration transferred in a
including contingent consideration business combination. Changes Revenue is measured at transaction
of the business combination then the in fair value of the contingent price, stated net of VAT and other
excess is recognised through profit or consideration that qualify as sales related taxes, if applicable.
loss immediately. measurement period adjustments
are adjusted retrospectively, with Infrastructure services
Where an acquisition involves a corresponding adjustments against The Group’s core business
potential payment of contingent goodwill. Measurement period provides managed Cloud computing
consideration the estimate of any adjustments are adjustments that infrastructure and connectivity. The
such payment is based on its fair arise from additional information Group considers the performance
value. To estimate the fair value obtained during the ‘measurement obligation to be the provision of FINANCE
an assessment is made as to the period’ (which cannot exceed one access and use of servers to our
amount of contingent consideration year from the acquisition date) clients. As the client receives and
which is likely to be paid having about facts and circumstances consumes the benefit of this use
regard to the criteria on which any hat existed at the acquisition date. and access over time, the related
sum due will be calculated and revenue is recognised evenly over
is probability based to reflect the Deferred consideration is recognised the life of the contract.
likelihood of different amounts at fair value at the acquisition date.
being paid. Where a change is Subsequent changes to the fair Monitoring software and
made to the fair value of contingent value of the deferred consideration, maintenance services
consideration within the initial which is deemed to be an asset or Following the acquisition of
measurement period as a result liability, are recognised either in the Velocimetrics, The Group also
of additional information obtained profit and loss account or in other provides software products that
on facts and circumstances that comprehensive income. analyse and monitor IT infrastructure.
existed at the acquisition date then Revenue from the provision of
this is accounted for as a change REVENUE RECOGNITION software licences is split between
in goodwill. Where changes are Revenue arises from the provision the delivery of the software licence
made to the fair value of contingent of Cloud-based localisation. To and the ongoing services associated
consideration as a result of events determine whether to recognise with the support and maintenance.
that occurred after the acquisition revenue, The Group follows a 5-step The supply of the software licence
date then the adjustment is process as follows: is recognised on a point in time
accounted for as a charge or credit 1. Identifying the contract with a basis when control of the goods has
to profit or loss. customer transferred, being the delivery of
2. Identifying the performance the item to the customer, whilst the
When the consideration transferred conditions ongoing support and maintenance
by The Group in a business 3. Determining the transaction price service is recognised evenly over the
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