Turnover represents the amount the Company expects to receive for products and services in its contracts with customers, net of discounts and sales taxes. The Company reports revenue under three revenue categories being, Software, Maintenance and License fees.
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
Perpetual License
Perpetual license fees are recognised as revenue when the software is delivered, no significant obligations or contingencies related to the software exist, other than maintenance, and all other revenue recognition criteria are met.
Maintenance
Revenue from maintenance is recognised rateably over the service period.
Software-as-a-Service (SaaS)
The company offers products via SaaS model, which is a subscription-based model. Subscription revenue derived from these agreements is generally recognised on a straight-line basis over the subscription term, provided persuasive evidence of an arrangement exists, access to the software has been granted to the customer, the fee for the subscription is fixed or determinable, and collection of subscription fee is probable.
Contracts with multiple products or services
Typically, the Company enters into contracts that contain multiple products across these revenue categories and evaluates these arrangements to determine the appropriate unit of accounting (performance obligation) for revenue recognition purposes based on whether the product or service is distinct from some or all of the other products or services in the arrangement.
Revenue from the license of software that involves complex implementation or customization that is not distinct, and/or includes sales of hardware that is not distinct, is recognized as a combined performance obligation using the percentage-of-completion method based either on the achievement of contractually defined milestones or based on labour hours.
Professional services revenue including installation, implementation, training and customization of software is recognized by the stage of completion of the performance obligation determined using the percentage of completion method noted above or as such services are performed as appropriate in the circumstances.
A product or service is distinct if the customer can benefit from it on its own or together with other readily available resources and the Company's promise to transfer the good or service is separately identifiable from other promises in the contractual arrangement with the customer.