| Contract Assets and Contract Liabilities |
4. Contract Assets and Contract Liabilities
Projects with performance
obligations recognized over time that have revenue recognized to date in excess of cumulative billings are reported on the Company’s
condensed consolidated balance sheets as “Contract assets”. Contract retentions, included in contract assets, represent amounts
withheld by clients, in accordance with underlying contract terms, until certain conditions are met or the project is completed. Provisions
for estimated losses of contract assets on uncompleted contracts are made in the period in which such losses are determined. Contract
assets that have billing terms with unconditional rights to be billed beyond one year are classified as non-current assets.
Contract assets consisted
of the following as of September 30, 2025 and March 31, 2025:
| | |
As of September 30, 2025 | | |
As of
March 31,
2025 | |
| | |
USD | | |
USD | |
| | |
(unaudited) | | |
(audited) | |
| Contract assets: | |
| | |
| |
| Revenue recognized in excess of amounts paid or payable (contract receivable) to the Company on uncompleted contracts (contract asset) excluding retainage | |
| 2,461,922 | | |
| 91,264 | |
| Retainage included in contract assets due to being conditional on something other than solely passage of time | |
| 2,748,678 | | |
| 2,262,130 | |
| Less: allowance for credit loss | |
| (121,861 | ) | |
| (58,332 | ) |
| Contract assets, net | |
| 5,088,739 | | |
| 2,295,062 | |
| | |
| | | |
| | |
| Contract assets, current | |
| 5,088,739 | | |
| 2,295,062 | |
| Contract assets, non-current | |
| - | | |
| - | |
The movement of revenue recognized
in excess of amounts paid or payable (excluding retainage) before net of allowance for credit loss is as follows:
| | |
As of September 30, 2025 | | |
As of
March 31,
2025 | |
| | |
USD | | |
USD | |
| | |
(unaudited) | | |
(audited) | |
| Balance at beginning of the period/ year | |
| 91,264 | | |
| 51,731 | |
| Increase as a result of total work completed during the period | |
| 2,461,922 | | |
| 91,264 | |
| Decrease as a result of total amount billed out | |
| (91,264 | ) | |
| (51,731 | ) |
| Balance at end of the period/ year | |
| 2,461,922 | | |
| 91,264 | |
The movement of retainage
before net of allowance for credit loss is as follows:
| | |
As of September 30, 2025 | | |
As of
March 31,
2025 | |
| | |
USD | | |
USD | |
| | |
(unaudited) | | |
(audited) | |
| Balance at beginning of the period/ year | |
| 2,262,130 | | |
| 1,853,616 | |
| Increase as a result of changes in progress of ongoing projects | |
| 486,548 | | |
| 418,001 | |
| Reclassified to accounts receivable as payment becomes unconditional | |
| - | | |
| (9,487 | ) |
| Balance at end of the period/ year | |
| 2,748,678 | | |
| 2,262,130 | |
Contract liabilities consisted of the following
as of September 30, 2025 and March 31, 2025:
| | |
As of September 30, 2025 | | |
As of
March 31,
2025 | |
| | |
USD | | |
USD | |
| | |
(unaudited) | | |
(audited) | |
| Payments received or receivable (contracts receivable) in excess of revenue recognized on uncompleted contracts (contract liability), excluding retainage | |
| 871,827 | | |
| - | |
Contract liabilities related to contracts are
balances due to customers under contracts. These arise if a particular milestone payment exceeds the revenue recognized to date under
the input method.
The movement in contract liabilities is as follows:
| | |
As of September 30, 2025 | | |
As of
March 31,
2025 | |
| | |
USD | | |
USD | |
| | |
(unaudited) | | |
(audited) | |
| Balance at beginning of the period/ year | |
| - | | |
| - | |
| Decrease in contract liabilities as a result of recognizing revenue during the year was included in the contract liabilities at the beginning of the period/ year | |
| - | | |
| - | |
| Increase in contract liabilities as a result of billings in advance of performance obligation under contracts | |
| 871,827 | | |
| - | |
| Balance at end of the period/ year | |
| 871,827 | | |
| - | |
Information about contract liabilities:
| | |
For the six months ended September 30, | |
| | |
2025 | | |
2024 | |
| | |
USD | | |
USD | |
| | |
(unaudited) | | |
(unaudited) | |
| Revenue recognized that was included in contract liabilities as of April 1, 2025 and 2024 | |
| - | | |
| - | |
|