ST Engineering Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 (CURRENCY – SINGAPORE DOLLARS UNLESS OTHERWISE STATED) C12 Deferred income Group 2020 2019 $’000 $’000 Government grants 121,397 34,888 Deferred rents – 1,824 121,397 36,712 Recognise: Within 1 year 70,922 2,403 After 1 year 50,475 34,309 121,397 36,712 Government grants relate mainly to grants received to subsidise the cost of capital assets and deferred grant recognised under the Jobs Support Scheme (the JSS) and other government support for employee related expenses. The JSS is a temporary scheme introduced in the Singapore Budget 2020 to help enterprise to retain local employees. Under the JSS, employers will receive cash grants in relation to the gross monthly wages of eligible employees. C13 Contract balances The following table provides information about contract assets and contract liabilities from contracts with customers. Group 2020 2019 2018 $’000 $’000 $’000 Contract assets 1,153,192 1,246,207 1,070,396 Contract liabilities (1,934,101) (1,466,207) (1,819,546) The timing of revenue recognition, billings and cash collections results in billed accounts receivable (included in trade receivables), unbilled receivables (contract assets), and customer advances (contract liabilities) on the balance sheet. The contract assets primarily relate to the Group’s rights to consideration for work completed but not billed at the reporting date. If the value of services rendered exceeds payments received from the customer, a contract asset is recognised and presented separately. The contract asset is transferred to receivables when the entitlement to payment becomes unconditional. The contract liabilities primarily relate to advance consideration received from customers for contract revenue. If the amounts invoiced to the customer exceeds the value of services rendered, a contract liability is recognised and presented separately. These assets and liabilities are reported on the balance sheet on a contract by contract basis at each reporting date. 20 1 ANNUAL REPORT 2 0 2 0 / CORPORATE OVERVI EW PERFORMANCE REVI EW SUSTAINABI L ITY CORPORATE GOVERNANCE F INANCIAL REPORT