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DURBAN UNIVERSITY OF TECHNOLOGY ANNUAL REPORT 2020
DURBAN UNIVERSITY OF TECHNOLOGY
BAN UNIVERSITY OF TECHNOLOGY
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020
1. ACCOUNTING POLICIES (continued) 1.17 Revenue recognition (continued)
Recognition and measurement of revenue from contracts with customers
 At the inception of a contract with a customer, the University assesses the goods or services promised in the contract and identifies as a performance obligation each promise to transfer to the customer either a good or service (or bundle of goods or services) that is distinct; or a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer.
 Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The University recognises revenue when it transfers control over a product or service to a customer.
 Transfer of control over a product or service is deemed to have taken place when the performance obligation relating to each specific contract has been satisfied. Performance obligations are satisfied either at a point in time or over time. Where performance obligations are satisfied over time, measurement of completion of the contract is recognised based on the specific performance obligations in the contract. Given the nature of the contracts completed over time, this method provides a faithful depiction of the transfer of goods and services for performance obligations satisfied over time.
 The performance obligation with respect to the sale of goods is recognized when the University entity has delivered its products to the customer and there is no unfulfilled obligation that could affect the customer’s acceptance of the product. Delivery does not occur until the products have been shipped to the specified location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed or the University has objective evidence that all criteria for acceptance have been satisfied. The performance obligation with respect to provision of services is recognised when the service has been provided to the customer.
 Payments by students and customers are typically made in cash or within the academic year of registration, based on the fee payment plan chosen by the student. Revenue is recognized at the present value of the consideration receivable over the contract period with the balance of the consideration being recognised as finance income over time when significant.
The following is a description of the principal activities from which the University generates its revenue:
1.17.1 State appropriations - subsidies and grants (IAS 20)
General purpose:
State appropriations and grants for general purposes is recognised as income in the financial year to which the subsidy relates to, provided there are no conditions. These typically take the form of state appropriations or grants that becomes receivable as compensation for expenses already incurred or for the purpose of providing immediate financial support to the University with no future related costs.
Specific purpose:
State appropriations and grants that are conditional and received in advance of the conditions being met is recognised as deferred revenue.
State appropriations and grants relating to capital assets are included in non-current liabilities as deferred revenue and is released to the consolidated income statement on a straight-line basis over the expected useful lives of the related assets. The portion of the grants that will be released to the consolidated income statement during the next 12 months is included in current liabilities as deferred revenue.