ST Engineering Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 (CURRENCY – SINGAPORE DOLLARS UNLESS OTHERWISE STATED) C13 Contract balances (continued) Significant changes in the contract assets and the contract liabilities balances during the year are as follows: Contract assets Contract liabilities Group 2020 2019 2020 2019 $’000 $’000 $’000 $’000 Revenue recognised that was included in the contract liability balance at the beginning of the year – – 518,900 734,615 Increase due to cash received, excluding amounts recognised as revenue during the year – – (1,009,124) (591,263) Contract assets recognised 580,964 902,185 – – Contract assets reclassified to trade receivables (552,819) (669,757) – – Changes in measurement of progress (8,727) (262) – – Transaction price allocated to the remaining performance obligations The aggregate amount of transaction price allocated to the remaining performance obligations as at 31 December 2020 is $15,403,538,000 and the Group expects to recognise $5,344,283,000 as revenue relating to the unsatisfied (or partially unsatisfied) performance obligations in 2021 with the remaining $10,059,255,000 in 2022 and beyond. As at 31 December 2019, the aggregate amount of transaction price allocated to the remaining performance obligations was $15,319,082,000 and the Group expected to recognise $5,867,193,000 as revenue relating to the unsatisfied (or partially unsatisfied) performance obligations in 2020 with the remaining $9,451,889,000 in 2021 and beyond. Variable consideration that is constrained and therefore not included in the transaction price is excluded in the amount presented above. Estimate and judgement: Contract balances Judgements are used to estimate these total contract costs to complete. In making these estimates, management has relied on past experience of completed projects. The estimated total contract costs are reviewed every reporting period and adjusted where necessary, with the corresponding effect of change being recognised prospectively from the date of change. / ST ENG I NEER I NG 202