Page 186 - Crisil Annual Report 2023

2.18 Revenue recognition
Income from operations
Income from operations comprises income from initial rating and surveillance services, global research and risk solutions, customised research, core research program, customer projects and experienced management programs, special assignments and subscriptions to information products and services, independent equity research (IER) services, IPO grading services, infrastructure consulting and risk management services.
• Revenue from Initial rating fees are deemed to accrue on the date the rating is awarded and a portion of it is deferred basis an estimate that will be attributed to future surveillance recorded equally over 11 months and recognise the deferred revenue over the estimated surveillance periods.
• Surveillance fee, subscription to information products and services, coalition business and revenue from IER are accounted on a time proportion basis and revenue is straight lined over the period of performance.
• Revenue from customised research and IPO grading services are recognised in the period in which such assignments are carried out in a time proportion basis.
• Global research and risk solutions revenue consists of time and material contracts which is recognised on output basis measured by number of hours/days/ weeks worked at the rates specified in the agreements.
• Core research program revenue is recognised at a point in time when research report is delivered to the customer.
• Revenue from infrastructure consulting, risk management services and customer projects and experience management program services are recognised in accordance with percentage completion method.
• Percentage of completion for infrastructure consulting is determined based on the project cost incurred to date as a percentage of total estimated project cost required to complete the project.
• Revenue from risk management services comprise of revenue from sale of software and annual maintenance contracts. Revenue from sale of software licenses are recognised upon delivery of these licenses which constitute transfer of all risks and rewards. Revenue from consultancy services and sale of software which involves customisation are recognised over execution period. Revenue from annual maintenance contracts are recognised on a time proportion basis.
Integrity Insight Impact
Provision for estimated losses, if any, on uncompleted contracts are recorded in the year in which such losses become certain based on the current estimates.
Unbilled receivables (only where act of invoicing is pending) when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms is classified under ‘Trade Receivables’.
Accrued revenue where the right to consideration is conditional upon factors other than the passage of time are contract assets which are classified as non- financial asset as the contractual right to consideration is dependent on completion of contractual milestones.
Unearned and deferred revenue (“contract liability”) is recognised when there are billings in excess of revenues.
The billing schedules agreed with customers include periodic performance based payments and/or milestone based progress payments. Invoices are payable within contractually agreed credit period. Contracts are subject to modification to account for changes in contract specification and requirements. The Group reviews modification to contract in conjunction with the original contract, basis which the transaction price could be allocated to a new performance obligation or transaction price of an existing obligation could undergo a change. In the event transaction price is revised for existing obligation, a cumulative adjustment is accounted for.
2.19 Other Income Grant income
Grants and subsidies are recognised at fair value where there is reasonable assurance that the grant/ subsidy will be received and all attaching conditions will be complied with.
Interest income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.
Dividend income
Dividend income is recognised when the Group’s right to receive payment is established by the balance sheet date.
184 Annual Report 2023