XML 113 R13.htm IDEA: XBRL DOCUMENT v3.22.1
Contracts with Customers
 12 Months Ended
Dec. 31, 2021
Revenue from Contract with Customer [Abstract]  
Contracts with Customers
Note 5 - Contracts with Customers
Contract Assets and Liabilities

Accrued revenue is classified as a current asset. When the right to consideration becomes unconditional based on the contractual billing schedule, accrued revenue is recognized. At the point that accrued revenue is billed, trade accounts receivable are recognized. Payment terms on invoice amounts are typically 30 days.

Deferred mobilization and contract preparation revenue include payments received for mobilization as well as rig preparation and upgrade activities, which are allocated to the overall performance obligation and recognized ratably over the initial term of the contract.

The following presents our contract assets and liabilities from our contracts with customers:
As of December 31,
(In $ millions)20212020
Accrued revenue20.2 20.3 
Current contract assets20.2 20.3 
Current deferred mobilization and contract preparation revenue (1)
(3.9)(2.6)
Current contract liability(3.9)(2.6)
Non-current deferred mobilization and contract preparation revenue (2)
(2.5)— 
Non-current contract liability(2.5)— 
Total contract liability(6.4)(2.6)

(1) Current deferred mobilization and contract preparation revenue is included in "Other current liabilities" in our Consolidated Balance Sheets (see Note 19 - Other Current Liabilities).

(2) Non-current deferred mobilization and contract preparation revenue is included in "Other non-current liabilities" in our Consolidated Balance Sheets.

Total movement in our contract assets and contract liabilities balances during the years ended December 31, 2021 and 2020 are as follows:

(In $ millions)Contract assetsContract liabilities
Balance as of December 31, 201931.75.6
Performance obligations satisfied during the reporting period20.3—
Amortization of revenue —(15.9)
Cash received, excluding amounts recognized as revenue—12.9
Cash received against the contract asset balance(31.7)—
Balance as of December 31, 2020 20.32.6
Performance obligations satisfied during the reporting period20.2—
Amortization of revenue—(5.9)
Cash received, excluding amounts recognized as revenue—9.7
Cash received against the contract asset balance(20.3)—
Balance as of December 31, 202120.26.4
Timing of revenue
The Company derives its revenue from contracts with customers for the transfer of goods and services, from various activities performed both at a point in time and over time, under the output method.

For the years ended December 31,
(In $ millions)202120202019
Over time234.7 288.8 314.2 
Point in time10.6 18.7 19.9 
Total245.3 307.5 334.1 

Revenue on existing contracts, where performance obligations are unsatisfied or partially unsatisfied at the balance sheet date, is expected to be recognized as follows:
As at December 31, 2021:

For the years ending December 31,
(In $ millions)202220232024 onwards
Dayrate revenue392.4 88.2 15.3 
Other revenue (1)
19.4 8.5 1.8 
Total411.8 96.7 17.1 

(1) Other revenue represents lump sum revenue associated with contract preparation and mobilization and is recognized ratably over the the firm term of the associated contract in "Dayrate revenue" in the Consolidated Statements of Operations.

Contract Costs

Deferred mobilization and contract preparation costs relate to costs incurred to prepare a rig for contract and delivery or to mobilize a rig to the drilling location. We defer pre‑operating costs, such as contract preparation and mobilization costs, and recognize such costs on a straight‑line basis, over the estimated firm period of the drilling contract. Costs incurred for the demobilization of rigs at contract completion are recognized as incurred during the demobilization process.

As of December 31,
(In $ millions)20212020
Current deferred mobilization and contract preparation costs 17.2 5.7 
Non-current deferred mobilization and contract preparation costs (1)
4.4 — 
Total deferred mobilization and contract preparation asset 21.6 5.7 

(1) Non-current deferred mobilization and contract preparation costs are included in "Other non-current assets" in our Consolidated Balance Sheets (see Note 17 - Other Non-Current Assets).

For the year ended December 31, 2021, total deferred mobilization and contract preparation costs increased by $15.9 million, as a result of $28.5 million additional deferred contract preparation and mobilization costs of the rigs "Norve", "Idun", "Natt", "Skald", "Groa","Gerd", "Mist" and "Ran", offset by amortization of $12.6 million.

Practical expedient

We have applied the disclosure practical expedient in ASC 606-10-50-14A(b) and have not included estimated variable consideration related to wholly unsatisfied performance obligations or to distinct future time increments within our contracts, including dayrate revenue. The duration of our performance obligations varies by contract.