8. Revenue

1 Revenue for the year ended 31 March 2021 has been re-presented for the reclassification to exited business activities of certain B2B businesses.

Total revenue comprises revenue from ongoing activities as well as revenue from exited business activities and is reconciled in note 9. Revenue in respect of exited business activities of US$21m (2021: US$30m) comprised UK and Ireland Data revenue of US$nil (2021: US$12m), EMEA/Asia Pacific Data revenue of US$8m (2021: US$3m) and EMEA/Asia Pacific Decisioning revenue of US$13m (2021: US$15m).

Data is predominantly transactional revenue with a portion from licence fees.

Decisioning revenue is derived from:

• software and system sales, and includes recurring licence fees, consultancy and implementation fees, and transactional charges;
• credit score fees which are primarily transactional; and
• analytics income comprising a mix of consultancy and professional fees as well as transactional revenue.

Consumer Services revenue primarily comprises monthly subscription and one-off fees, and referral fees for credit products and white-label partnerships.

The timing of recognition of these revenue streams is discussed in note 4(q).

(b) Significant changes in contract balances

Contract assets predominantly relate to software licence services, where revenue recognition for on-premise arrangements occurs as the solution is transferred to the customer, whereas the invoicing pattern is often annually over the contract period. Contract assets recognised during the year totalled US$70m (2021: US$62m). The contract asset balance for work completed but not invoiced on satisfaction of a performance obligation unwinds over the contract term. Contract assets are transferred to receivables when the right to consideration becomes unconditional, or conditional only on the passage of time. Contract assets reclassified to receivables during the year totalled US$77m (2021: US$79m). An impairment charge of US$5m (2021: US$4m) has been recognised against contract assets during the year. The decrease in contract assets resulting from the disposal during the year was US$5m (2021: US$nil).

The majority of software licences are invoiced annually in advance. Where these licences relate to Experian-hosted solutions, revenue is recognised over the period that the service is available to the customer, creating a contract liability. Delivery services are generally invoiced during the delivery period, creating a contract liability for the consideration received in advance, until the delivery is complete. Where the delivery relates to Experian-hosted solutions, revenue is recognised over the period that the service is available to the customer, reducing the contract liability over time. Where the delivery relates to an on-premise solution, the contract liability is released on delivery completion. Support and maintenance agreements are often invoiced annually in advance, creating a contract liability, which is released over the term of the maintenance period as revenue is recognised.

Revenue recognised in the year of US$370m (2021: US$352m) was included in the opening contract liability. Cash received in advance not recognised as revenue in the year was US$461m (2021: US$380m). The decrease in contract liabilities resulting from the disposal during the year was US$4m (2021: US$nil). The increase in contract liabilities from acquisitions during the year was US$1m (2021: US$8m).

Foreign exchange accounts for US$3m and US$5m of the decrease in contract asset and contract liability balances in the year respectively (2021: increase of US$8m and US$21m).

(c) Contract costs

The carrying amount of assets recognised from costs to obtain, and costs to fulfil, contracts with customers at 31 March 2022 is US$22m and US$66m respectively (2021: US$25m and US$74m).

Amortisation of contract costs in the year is US$59m (2021: US$66m) and recognised impairment losses totalled US$nil (2021: US$2m). The decrease in contract costs resulting from acquisitions and the disposal during the year was US$2m (2021: US$nil).

Contract costs are amortised on a systematic basis consistent with the pattern of transfer of the related goods or services. A portfolio approach has been applied to calculate contract costs for contracts with similar characteristics, where the Group reasonably expects that the effects of applying a portfolio approach does not differ materially from calculating the amounts at an individual contract level.

(d) Transaction price allocated to remaining performance obligations

The aggregate amount of the transaction price from non-cancellable contracts with customers with expected durations of 12 months or more, allocated to the performance obligations that are unsatisfied, or partially satisfied, at 31 March 2022 is US$5.3bn (2021: US$5.0bn). We expect to recognise approximately 45% (2021: 42%) of this value within one year, 30% (2021: 28%) within one to two years, 15% (2021: 17%) within two to three years and 10% (2021: 13%) thereafter.

The aggregate amount of the transaction price allocated to unsatisfied, or partially satisfied, performance obligations which are transactional in nature includes estimates of variable consideration. These estimates are based on forecast transactional volumes and do not take into account all external market factors which may have an impact on the future revenue recognised from such contracts.

A portfolio approach has been applied to calculate the aggregate amount of the transaction price allocated to the unsatisfied, or partially satisfied, performance obligations for contracts with similar characteristics, where the Group reasonably expects that the effects of applying a portfolio approach does not differ materially from calculating the amounts at an individual contract level.

We apply the practical expedient in paragraph 121(a) of IFRS 15 and do not disclose information about remaining performance obligations that have original expected durations of one year or less. This excludes contracts across a number of business units which have revenue due to be recognised in the financial year ending 31 March 2023; it also excludes the majority of our direct-to-consumer arrangements.