3. Revenue
In the following table, revenues are broken down into a combination of transport type and geographic area.
(in millions of euros) | External revenue | Additional government contributions related to COVID-19 | 2022 |
Train-related transport in the Netherlands | 2,362 | 274 | 2,636 |
Station development and exploitation in the Netherlands | 437 | 12 | 449 |
Train-related transport in Germany | 256 | - | 256 |
Total revenue | 3,055 | 286 | 3,341 |
(in millions of euros) | External revenue | Additional government contributions related to COVID-19 | 2021 |
Train-related transport in the Netherlands | 1,547 | 925 | 2,472 |
Station development and exploitation in the Netherlands | 327 | 15 | 342 |
Train-related transport in Germany | 378 | - | 378 |
Total revenue | 2,252 | 940 | 3,192 |
Public transport availability payment/main rail network (train-related transport in the Netherlands)
By virtue of the public transport availability fee arrangement (BVOV) as enacted by the Ministry of Infrastructure and Water Management, NS is entitled to compensation for loss of revenue suffered by NS as a result of COVID-19. The compensation amounts to 93% of the indexed 2019 cost level for the 2021 and 2022 availability fee, minus 100% of the realised revenues. For 2021 and 2022, NS is entitled to BVOV for the entire year. Based on a calculation, NS has accounted for the compensation in the amount of € 274 million (2021: € 925 million). Conditions apply to claiming the public transport availability fee, such as operating a suitable timetable (at least comparable with 2021) and complying with tender legislation, a dividend ban, a ban on severance payments to Dutch executives and a bonus ban for executives and board members within the Dutch entities. NS has come to the conclusion that the availability fee for 2021 and 2022 can be justified by assessing it against the conditions. Due to the scaling down of rolling stock in 2022, the timetable is sometimes less than in 2021. To this end, NS has applied a proportional correction to the BVOV for 2022. The BVOV contribution for 2022 has not yet been finalised.
Temporary emergency bridging measure for sustained employment (Noodfonds Overbrugging Werkgelegenheid; NOW)
For the activities relating to station development and operation in the Netherlands, so-called NOW compensation (operating company scheme) was applied for and recognised as revenue for an amount of € 12 million (2021: € 15 million). In order to claim the NOW compensation, conditions apply, such as the ban on management bonuses, dividend payments and agreement by the employee representative body. NOW 1.0 and 2.0 have now been definitively adopted. The applicable conditions have been reviewed by NS and on this basis NS has concluded that the NOW compensation can be justified in 2021 and 2022.
Miscellaneous
Station development and operation in the Netherlands includes an amount of € 42 million (2021: € 31 million) relating to development activities.
Accounting policy
Revenue
Revenue is recognised on the basis of the fee established in a contract with a customer. The Group recognises revenue when it transfers control of a good or service to a customer. Revenue includes transport revenue including additional contributions from governments within the framework of COVID-19 and revenue from other business activities after deduction of discounts and VAT.
Provision of services and sale of goods
Revenue from the sale of travel rights is recognised when the travel right arises. Subscription revenue is recognised in the income statement over time and distributed over the validity of the subscription period.
Revenue from the sale of goods is recognised in the income statement when control of the goods has been transferred to the buyer, recovery of the consideration due is probable and the associated costs or any returns of goods can be reliably estimated.
Fees from the government or similar bodies arising from transport contracts or transport franchises are recognised in the income statement over the period to which the fee relates.
Additional government contributions in the context of COVID-19
Government contributions in the context of COVID-19 are determined on the basis of individual arrangements with various government agencies and are intended to cover costs incurred or if compensate for loss of revenue during (part of) the financial year. The final amount of these contributions for 2022 will be finalised in 2023, but the contributions are sufficiently certain to be recognised in the financial statements on the basis of IAS 20. Contributions have been allocated to the period to which they apply. The availability fee in the Netherlands was determined on the basis of the technical memorandum and the audit protocol.
Rental income
Rental income from property is recognised in the income statement over time, based on the duration of the rental period. Commitment costs incurred as an incentive to enter into lease arrangements are recognised as an integral part of the total rental income and spread on a straight-line basis over the contract period. Rent reductions granted as a result of COVID-19 during current contracts for services to be provided are spread on a straight-line basis over the contract period. Rent reductions granted retroactively for services already rendered are not deducted from revenue but are included in the assessment of expected credit losses under IFRS 9.
Development revenues
Development revenues are recognised in proportion to the performance contractually agreed with the customer.