Revenue from Contracts with Customers and Relevant Contract Assets and Liabilities

12 Months Ended

Dec. 31, 2020

Revenue from Contracts with Customers and Relevant Contract Assets and Liabilities

26.	Revenue from Contracts with Customers and Relevant Contract Assets and Liabilities

The Group has recognized the following amounts relating to revenue in the Consolidated Statements of Operations:


(In millions of Korean won)	2018		2019		2020
Revenue from contracts with customers	￦	23,012,257	￦	24,441,122	￦	23,895,631
Revenue from other sources		423,793		458,067		545,016

Total revenue	￦	23,436,050	￦	24,899,189	￦	24,440,647

Operating revenues for the years ended December 31, 2018, 2019 and 2020 are as follows:


(In millions of Korean won)	2018		2019		2020
Mobile services	￦	6,827,685	￦	6,795,124	￦	6,805,218
Fixed-line services		4,869,253		4,866,698		4,827,015
Fixed-line and VoIP telephone services		1,708,319		1,578,546		1,463,553
Broadband Internet access services		2,112,763		2,177,447		2,256,188
Data communication services		1,048,171		1,110,705		1,107,274
Media and content		2,261,808		2,516,256		2,637,691
Financial services		3,444,917		3,641,655		3,493,920
Sale of goods		3,288,911		4,194,168		3,593,127
Others		2,743,476		2,885,288		3,083,676

Total	￦	23,436,050	￦	24,899,189	￦	24,440,647

Mobile and fixed-line service

Telecommunication service revenues include mobile and fixed-line(e.g., fixed-line and VoIP telephone, broadband internet access services and data communication services). These services represent a series of distinct services that are considered a separate performance obligations. Service revenue is recognized when services are provided, based upon either usage (e.g., minutes of traffic/bytes of data processed) or period of time (e.g., monthly service fees).

Media and content services

Revenue from media and content services primarily consists of installation fees and basic monthly charges of IPTV and satellite TV services, as well as revenue from digital content distribution, digital music streaming and downloading. Media and contents services revenue are recognized when services are provided, based upon either usage or period of time.

Financial services

Financial services primarily include commissions for merchant fees paid by merchants to credit card companies for processing transactions. Revenue from the commission is recognized when the service obligation is performed.

Sale of goods

Revenue from sale of goods, primarily handsets related to our mobile services is recognized when a performance obligation is satisfied by transferring promised goods to customers.

The contract assets and liabilities recognized in relation to the revenues from contracts with customers are as follows:


(In millions of Korean won)	December 31, 2019		December 31, 2020
Contract assets 1	￦	655,329	￦	672,672
Contract liabilities 1		413,442		413,707
Deferred revenue 2	￦	92,557	￦	89,694

The Group recognized contract assets of

￦

86,234 million and contract liabilities of

￦

29,574 million for long term construction contracts as at December 31, 2020 (2019: contract assets of

￦

98,288 million and contract liabilities of

￦

47,832 million). The Group recognizes contract assets as trade and other receivables, and contract liabilities as other current liabilities.

Deferred revenue recognized relating to government grant is excluded.

The contract costs recognized as assets are as follows:


(In millions of Korean won)	December 31, 2019		December 31, 2020
Incremental cost of contract establishment	￦	1,764,009	￦	1,726,191
Cost of Contract performance		85,234		78,757

As at December 31, 2020, the Group recognized

￦

1,831,638 million (2019:

￦

1,681,039 million) of operating expenses related to contract cost assets.

The recognized revenue arising from carried-forward contract liabilities from prior year is as follows:


(In millions of Korean won)	2018		2019		2020
Revenue recognized that was included in the contract liability balance at the beginning of the year
Allocation of the transaction price	￦	183,905	￦	266,478	￦	251,975
Deferred revenue of joining/installment fee		39,975		44,032		42,685
Others		1,536		—		—

Total	￦	225,416	￦	310,510	￦	294,660