Balances under contracts with customers and other ifrs 15 disclosures statements

12 Months Ended

Dec. 31, 2024

Balances under contracts with customers and other IFRS15 disclosures [Abstract]

Disclosure of balances under contracts with customers and other iFRS15 disclosures [Text Block]

4.4 BALANCES UNDER CONTRACTS WITH CUSTOMERS AND OTHER IFRS 15 DISCLOSURES

Balance sheet information under IFRS 15

As indicated in Note 1.3.3.4 in relation to the policy for recognizing contract revenue (IFRS 15), for contracts in which the performance obligations are measured over time, the difference between the revenues recognized for services rendered and the amounts actually billed to the customer are systematically analyzed on a contract-by-contract basis.

If the amount billed is lower than the revenue recognized, the difference is recognized as an asset under “Trade receivables for sales and services – Net completed work pending certification” (Note 4.2), whereas if the revenue recognized is lower than the amount billed, a liability is recognized under “Short-term trade and other payables - Work certified in advance” (Note 4.3).

For certain construction contracts, advances are agreed, paid by the customer at contract inception and offset against progress billings as the works are executed.

These balances are carried on the liabilities side of the balance sheet under the heading “Trade payables” (Note 4.3.a).

In contrast to the advance payments, under some contracts the customer retains a portion of each progress billing payment to guarantee certain contractual obligations are met, which is not reimbursed until the contract is definitively settled. These balances are carried on the assets side of the balance sheet under “Trade receivables for sales and services” (Note 4.2.a).

Unlike completed work pending certification and work certified in advance, advances and retentions are balances that will have an impact on future cash flows, since in the case of the advances a lower amount will be collected in the future as the advances are discounted from the progress billings, whereas the retentions will give rise to higher collections in the future, since the customer will reimburse the related amounts as and when the contract work is settled. Most of the revenue recognized during the reporting period was included in the contract liability balance at the beginning of the period.

Set out below is a breakdown of the amounts recognized in this connection at December 31, 2024 and 2023:


Million euro	2023	Exchange rate	Consolidation scope changes	Other	2024
Completed work pending certification	446	10	—	118	573
Retentions	160	3	—	28	191
Total customer contract assets	606	13	—	146	764
Work certified in advance	1,124	26	—	77	1,227
Advance payments	406	1	—	(14)	392
Total customer contract liabilities	1,530	27	—	63	1,619


Million euro	2022	Exchange rate	Consolidation scope changes	Other	2023
Completed work pending certification	406	2	—	38	446
Retentions	141	1	—	18	160
Total customer contract assets	547	3	—	56	606
Work certified in advance	962	(3)	—	165	1,124
Advance payments	402	5	—	(1)	406
Total customer contract liabilities	1,364	2	—	164	1,530

The balance of work completed pending certification at December 31, 2024 and 2023 related almost entirely to revenue under the main contract with the customer since, according to the Group’s general policy, only work that is due and payable, i.e. has been approved by the customer, may be recognized in the financial statements. Claims only include cases in which it is deemed highly likely that there will be no reversal of revenue in the future.

In general, performance obligations in the construction business are fulfilled over time. Therefore, as the amounts relating to changes and claims are immaterial under the completed work pending certification heading, the balance relates basically to differences between work completed and work certified due to timing differences in the customer certification and review process, billing milestones or certification schedule.

Other disclosures relating to IFRS 15:

Revenue from contracts with customers:

EUR 9,024 million of the total revenue recognized in 2024 (EUR 8,339 million and EUR 7,385 million in 2023 and 2022, respectively) (Note 2.1 Operating income) relates to revenue from contracts with customers, which accounted for 98.7% of revenue recognized (97.9% and 97.8% in 2023 and 2022, respectively).


Million euro	2024	2023	2022
Construction	7,091	6,909	6,287
Toll Roads	1,236	1,071	765
Airports	90	8	5
Other segments	607	351	328
Revenue from contracts with customers	9,024	8,339	7,385

The table below shows a breakdown of income pending recognition in relation to uncompleted performance obligations by business area at year-end, and includes an estimate of the years in which it is expected to appear in income:


REVENUE	2025	2026	2027	2028	2029 and beyond	TOTAL
Construction	6,482	5,309	2,521	683	1,760	16,756
Energy	523	193	113	101	394	1,324
Total	7,005	5,502	2,634	784	2,154	18,080

In 2024, there are a total of 738 contracts in force in the Construction businesses (750 contracts in 2023) and 138 Energy contracts (198 contracts in 2023).