222 F INANC IAL Statements 05 Sect ion Ranhi ll Ut i l i t i es Berhad NOTES TO THE F INANC I AL STATEMENTS For the year ended 31 December 2022 25. CONTRACT RELATED ASSETS AND LIABILITIES Group 2022 RM’000 2021 RM’000 Contract assets and liabilities Contract assets - Current 118,842 85,981 - Non-current 30,048 3,897 148,890 89,878 Contract liabilities (6,488) (5,070) Net 142,402 84,808 At beginning of year 84,808 28,375 Acquisition during the year (Note 20) - 35,967 Finance income from contract asset 338 - Consideration for work completed but not yet billed 757 - Obligation to transfer services to customer (631) - Consideration paid/payable to customers (3,483) (1,040) Revenue recognised during the year 241,617 156,905 Progress billing during the year (179,108) (135,490) Provision for liquidated ascertained damages (2,407) (214) Reversal of impairment on contract asset (Note 8) 511 305 At end of year 142,402 84,808 Contract assets are initially recognised for revenue earned from services and solar energy contracts, which includes non-revenue water reduction fee, construction contract, professional services contracts and engineering service contracts as receipt of consideration is conditional on successful completion of work. Upon completion of work, the amounts recognised as contract assets are reclassified to trade receivables or operating financial assets. Contract liability is initially recognised when the Group receives consideration before the completion of construction. Contract liabilities are initially recognised when the Group invoices in advance or ahead of the satisfaction of the performance obligations by the Group. Contract liability is recognised as revenue when the Group performed under the contract. The transaction price allocated to the remaining performance obligations (unsatisfied or partially satisfied), in respect of construction contract as at 31 December 2022 is RM223,214,000 (2021: RM207,373,000) and expected to be completed within 1 year. There was no impairment loss recognised on contract assets during the financial year.
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