Revenue from customer contracts is recognized over time for new installations and modernizations, as well as for maintenance. Revenue for repairs is recognized at a point in time.
New installations and modernizations
New installations provide mobility solutions with elevators, escalators, and moving walks for all applications and needs, whereas modernizations offer solutions for existing installations. For both, control is transferred continuously to the customer from the start of the installation of the unit, as the work performed by the Group enhances an asset controlled by the customer.
Revenue is recognized over time based on the cost-to-cost method under which the accumulated costs to date are expressed as a percentage of the expected costs. Anticipated losses are recognized as onerous contract provisions. A performance obligation typically represents the installation or modernization of elevators, escalators, or moving walks.
Maintenance services are rendered for the full range of existing installations. Control transfers to the customer equally over the contract period based on the time elapsed. Maintenance revenue is recognized over the contract period as the service is provided, according to the agreed contractual terms and conditions.
Repairs include a wide range of repair services for existing installations. For repairs, the customer benefits from the service and obtains control once the repair is completed. Revenue for repairs is recognized at the point of customer acceptance.
The Group recognized revenue from customer contracts in the respective regions in which it operates, as follows:
|In CHF million||Revenue recognized over time||Revenue recognized at a point in time||Other operating revenue||Total||Revenue recognized over time||Revenue recognized at a point in time||Other operating revenue||Total|
|EMEA||3 911||995||32||4 938||3 819||938||24||4 781|
|Americas||2 421||485||–||2 906||2 438||473||–||2 911|
|Asia-Pacific||3 151||235||6||3 392||2 729||207||12||2 948|
|Total revenue||9 483||1 715||38||11 236||8 986||1 618||36||10 640|
Revenue from unsatisfied or partially unsatisfied performance obligations relates to not yet completed new installation and modernization contracts in the order backlog or maintenance contracts not yet fulfilled. The majority of the new installation and modernization contracts reported in the order backlog are recognized as revenue in the next two years, whereas the average contract duration of not yet expired maintenance contracts is somewhat longer.
Unsatisfied performance obligations are translated at the year-end exchange rates of the reporting year when estimating revenue to be recognized in future years. The movement in exchange rates could materially impact amounts disclosed. The Group expects CHF 8 400 million to be recognized in the following year (previous year: CHF 7 900 million), CHF 5 800 million in the following two to three years (previous year: CHF 5 400 million), and CHF 2 500 million in more than three years (previous year: CHF 2 500 million).