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Contract assets and liabilities
 12 Months Ended
Dec. 31, 2020
Contract assets and liabilities

Contracts with customers usually stipulate the timing of payment, which is defined by the terms found within the various contracts under which work was performed during the period. Therefore, contract assets and liabilities are created when the timing of costs incurred on work performed does not coincide with the billing terms.

 

The Group’s consolidated balance sheets present contract assets which contains earned unbilled revenue associated with contract work that has been completed but not paid by customers, that are generally due once the job is completed and approved.

 

Contract assets consisted of the following at December 31:

 

    2020     2019  
    US$’000     US$’000  
             
   Unbilled revenue     202       441  

 

The Group’s consolidated balance sheets present contract liabilities which contains deferred revenue (previously identified as billings in excess of costs and estimated earnings on uncompleted contracts).

 

Contract liabilities consisted of the following at December 31:

 

    2020     2019  
    US$’000     US$’000  
             
   Deferred revenue     1,063       869  

 

The following table provides information about contract assets and contract liabilities from contracts with customers:

 

    December 31,  
    2020     2019  
    US$’000     US$’000  
             
   Contract assets     202       441  
   Contract liabilities     (1,063 )     (869 )
                 
   Net contract liabilities     (861 )     (428 )

 

The difference between the opening and closing balances of the Group’s contract assets and contract liabilities primarily results from the timing of the Group’s billings in relation to its performance of work. The amounts of revenue recognized in the period that were included in the opening contract liability balances were US$1,214,000 and US$1,225,000 for the years ended December 31, 2020 and 2019, respectively. The revenue consists primarily of work performed on previous billings to customers.

 

The net liabilities position for contracts in process consisted of the following at December 31:

 

    2020     2019  
    US$’000     US$’000  
             
   Cost and estimated earnings on uncompleted contracts     1,904       5,150  
   Less: billings to date     (2,765 )     (5,578 )
                 
      (861 )     (428 )

 

 

The net liabilities position for contracts in process is included within the contract asset and contract liability in the accompanying consolidated balance sheets as follows at December 31:

 

    2020     2019  
    US$’000     US$’000  
             
   Unbilled revenue     202       441  
   Deferred revenue     (1,063 )     (869 )
                 
      (861 )     (428 )

 
ZHEJIANG TIANLAN  
Contract assets and liabilities

Contracts with customers usually stipulate the timing of payment, which is defined by the terms found within the various contracts under which work was performed during the period. Therefore, contract assets and liabilities are created when the timing of costs incurred on work performed does not coincide with the billing terms.

 

The Group’s consolidated balance sheets present contract assets which contains unbilled revenue associated with contract work that has been completed but not paid by customers, that are generally due once the job is completed and approved.

 

Contract assets consisted of the following at December 31:

 

    2020     2019  
    RMB’000     RMB’000  
             
Unbilled revenue     94,494       80,961  

 

The Group’s consolidated balance sheets present contract liabilities which contain deferred revenue (previously identified as billings in excess of costs and estimated earnings on uncompleted contracts).

 

Contract liabilities consisted of the following at December 31:

 

    2020     2019  
    RMB’000     RMB’000  
             
Deferred revenue     47,135       55,898  

 

The following table provides information about contract assets and contract liabilities from contracts with customers at December 31:

 

    2020     2019  
    RMB’000     RMB’000  
             
Contract assets     94,494       80,961  
Contract liabilities     (47,135 )     (55,898 )
                 
Net contract assets     47,359       25,063  

 

The difference between the opening and closing balances of the Group’s contract assets and contract liabilities primarily results from the timing of the Group’s billings in relation to its performance of work.

 

The net asset position for contracts in process consisted of the following at December 31:

 

    2020     2019  
    RMB’000     RMB’000  
             
Costs and estimated earnings on uncompleted contracts     406,064       433,195  
Less: billings to date     (358,705 )     (408,132 )
                 
      47,359       25,063