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 sale of goods and from the rendering of services. Turnover is reduced for estimated customer returns, rebates and other similar allowances.
Rendering of services
Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. Turnover is only recognised to the extent of recoverable expenses when the outcome of a contract cannot be estimated reliably.
Revenue from hardware sales
A new recognition policy was introduced from 1st July 2023 in how hardware sales are recognised, this new policy is not reflected in the comparative period as the recognition policy requires live data and therefore it was impractical to accurately record on historic data.
The new policy accounts for the complexities of hardware procurement, construction phases, and installation, alongside the continuous transfer of risks and rewards throughout the project lifecycle. Revenue is recognised in stages that reflect the ongoing transfer of risks and rewards. In case of project termination, Virtalis is entitled to revenue for the completed work. This policy ensures that revenue recognition reflects project milestones and the transfer of risks.