Lendlease Annual Report 2022

Financial Statements 149 June 2022 June 2021 Note $m $m Current Trade and accrued creditors 2,316 2,243 Construction contract liabilities 22.a 1,327 1,379 Related parties 197 263 Retentions 344 386 Deferred land payments 126 278 Unearned income 22.a 38 27 Lease liabilities 77 67 Other 132 196 Total current 4,557 4,839 June 2022 June 2021 Note $m $m Non Current Trade and accrued creditors 1 366 316 Retentions 51 47 Deferred land payments 330 366 Unearned income 22.a 77 67 Lease liabilities 331 407 Other 1 833 557 Total non current 1,988 1,760 Total trade and other payables 6,545 6,599 1. Prior period balances have been reclassified from Other to Trade and accrued creditors to reflect updated management information. As a result of the revised strategy announcement and business review undertaken by the Global CEO during the financial year, the Group assessed its right of use assets. The Group calculated its remaining recoverable right of use assets using a discounted cashflow model with a discount rate of 3.6 per cent. This resulted in a tenancy impairment expense of $104 million in Corporate Activities and $25 million in the Non core segment. As at 30 June 2022, the Group recognised right-of-use assets of $188 million (30 June 2021: $325 million) within Property, Plant and Equipment. Refer to Note 1 'Segment Reporting' and Note 7 'Other Expenses' for further details. June 2022 June 2021 22.a. Contract Liabilities $m $m Current Unearned income 1 38 27 Construction contract liabilities 2 1,327 1,379 Total current 1,365 1,406 Non Current Unearned income 1 77 67 Total non current 77 67 Total contract liabilities 1,442 1,473 1. Movements in Unearned income relates primarily to residential presales settled during the financial year and deposits received for development properties. 2. Movements in Construction contract liabilities relate primarily to revenue recognised during the period in excess of billings raised on construction contracts with customers. This balance also contains provisions previously incurred on retained Engineering projects that are in progress. During the year, the Group recognised $482 million in revenue from contracts that held a contract liability balance at the beginning of the financial year. The total transaction price relating to the Group’s Unearned income on the Group’s development contracts at June 2022 is $439 million relating primarily to various UK and Australian projects. The difference between the Unearned income amount noted in the table above and this amount primarily relates to the remaining development value of apartments versus the deposit amount received. Revenue from these contracts is expected to be realised as control over each asset is transferred to the customer. The total transaction price allocated to unsatisfied performance obligations on the Group’s construction contracts as at June 2022 is $14.8 billion. This includes new work secured during the financial year. Of the total construction backlog, 54 per cent is expected to be realised within the next 12 months to June 2023 (June 2021: 44 per cent to June 2022), 30 per cent to June 2024 (June 2021: 31 per cent to June 2023) and the remaining 16 per cent realised post June 2024 (June 2021: 25 per cent post June 2023).