Answer – Revenue Recognition

This is the answers for Quiz – Revenue Recognition.

MYR MillionQ4 2021Q3 2021Q2 2021Q1 2021Q4 2020Q3 2020Q2 2020
Current billed receivables50.657.161.266.458.142.544.7
Accrued (unbilled) receivables41.939.
Long-term instalment receivables26.913.
Total Receivables119.4109.2110.5101.293.178.769.8
Net Income10.98.3
Cash flow from operations1.49.4
CFFO – Net Income  (9.5)   1.1
DSO Total Receivables11811211610710710489
DSO unbilled & long-term receivables68535237404832


Accrued receivables are rising much faster than revenues & long-term receivables rising dramatically through 2021, potentially indicating highly aggressive income recognition policies relating to long-term system development contracts. The deteriorating liquidity is shown by the rise in DSO figures.

This rise is considerably in excess of the rise in revenue and is accompanied by a fall in cash flow from operations, which by 2016 is lagging well behind profit.

If income has been recognised earlier than would be appropriate, this would mean less revenue would show in future periods, thereby showing apparently worse performance in these periods.

Maintaining the revenue and profits growth in future periods would therefore be even more challenging.

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