Page 68 - Beeks Financial Cloud Group Annual Report 2021

66 Beeks Financial Cloud Group PLC For the year ended 30 June 2021

Notes to the Consolidated Financial Statements

Notes to

Financial Statements

period of the service being rendered equipment is completed on a point will be received, and all attached
on an over time basis. The Group in time basis. conditions will be complied with.
applies judgement to determine When the grant relates to an
the percentage of split between the Hardware and software sales expense item, it is recognised as
licence and maintenance portions, Revenue from the supply of income on a systematic basis over
which includes an assessment of the hardware or software is recognised the periods that the related costs, for
pricing model and comparison to when control of the goods has which it is intended to compensate,
industry standards transferred, being when delivery are expensed. When the grant relates
to the customer of the item is to an asset, it is deducted from
Revenue from the provision of completed, on a point in time basis. carrying amount of the intangible
perpetual licences in exchange for asset over the expected useful life
a minimum guaranteed royalty The Group has concluded it acts as a of the related asset. Note 3 Revenue
fee, is recognised at a point in time principal in each sales transaction vs provides further information on
basis when the delivery of the item an agent. This has been determined Government grants.
is complete. by giving consideration to whether
The Group holds inventory risk, COST OF SALES
Set up fees has control over the pricing over a Costs considered to be directly
FINANCE
Set up fees charged on contracts particular service, takes the credit risk, related to revenue are accounted
are reviewed to consider the and whether responsibility ultimately for as cost of sales. All direct
material rights of the set-up fee. sits within The Group to service the production costs and overheads,
When a set-up fee is arranged, promise of the agreements. including indirect overheads that
Beeks will consider the material can reasonably be allocated, have
rights of the set-up fee, if in Professional services been classified as cost of sales.
substance it constitutes a payment and training services
in advance, the set-up fee will be Revenue from Consultancy services INTEREST
deemed to be a material right. are recognised as these services Interest revenue is recognised as
The accounting treatment for both are rendered and the performance interest accrues using the effective
material rights and non-material obligation satisfied. Any unearned interest method. This is a method of
rights set-up fees is as follows: portion of revenue( i.e. amounts calculating the amortised cost of a
/ Any set up fees that are material invoiced in advance of the service financial asset and allocating the
rights are spread over The Group’s being provided) is included in interest income over the relevant
average contract term payables as deferred revenue. period using the effective interest
/ Set up fees that are not material rate, which is the rate that exactly
rights are recognised over the Revenue recognised over time and at discounts estimated future cash
enforceable right period, i.e. 1 a point in time is disclosed at note 3 of receipts through the expected life of
to 3 months depending on the the notes to the financial statements. the financial asset to the net carrying
termination period amount of the financial asset.
GOVERNMENT GRANT INCOME
Revenue in respect of installation Grants from Government agencies EXCEPTIONAL COSTS
or training, is recognised when are recognised where there is The Group defines exceptional items
delivery and installation of the reasonable assurance that the grant as costs incurred by The Group which