Is this reason for delay?23 Mar 2023 09:55
The Board has made two prior year restatements to continuing operations, both related to revenue recognised under IFRS15 (Revenue from Contracts with Customers). The first restatement relates to the timing of revenue recognition for a small number of contracts with a single customer in China, where an adjustment to correct the approach taken in previous years has been made, to adhere to IFRS15 requirements on enforceable rights to payment in the event of termination of contract by the customer.
The second case relates to contracts directly related to Mechanical Stress Improvement Process technology and specifically whether these contracts contained two performance obligations (the conclusion reached in prior years) or one. This is an area which requires significant judgement and after careful consideration, the Board decided to account for the contracts as having one rather than two performance obligations. The impact of this change has been reflected on previous years' results as a prior year restatement.
The Board has also made two prior year restatements to discontinued operations, both related to revenue recognition. Firstly, in prior years the Group had incorrectly identified itself as acting as a principal when recognising revenue related to fertiliser sales, made through one specific supplier. A review of this transaction highlighted that the Group was acting as an agent, rather than principal, under IFRS 15 guidance, which means the net proceeds from the transaction, rather than gross sales, should be recognised as revenue. A correction to reduce both revenue and cost of sales in the prior year has been made. A further correction to reduce both revenue and cost of sales has also been made in respect of intra-company transactions which had not been netted off in prior years. In both cases there is no impact on profit.
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