Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the rendering of services including direct expenses incurred on client projects.
Rendering of services
Where the outcome of a project can be estimated reliably and the revenue associated with the project can be estimated reliably, the project revenue is recognised in the profit and loss account by reference to the stage of completion at the balance sheet date, if the right to the consideration has been obtained through performance.
Factors taken into account in assessing the percentage completion of a project include, hours worked against expected hours, project phases, milestones or deliverables completed.
Consideration accrues as project activity progresses by reference to the value of work performed. Where the value of consideration exceeds the amount invoiced, this is recognised as accrued income within debtors. Where the amount invoiced exceeds the value of project work performed the excess is recognised as deferred income within creditors.
If the right to consideration is conditional or contingent on a specified future event or outcome, the occurrence of which is outside the Company's control, turnover is not recognised until that critical event occurs.
When services are performed by an indeterminate number of acts over a specified period of time, revenue is recognised on a straight-line basis over the specified period unless there is evidence that some other method better represents the stage of completion.