Revenue Recognition - Revenue from EV chargers is recognized at a point in time when control is transferred to the customer [517]. - For the fiscal years ended June 30, 2022, 2021, and 2020, the percentage of total revenue recognized under bill-and-hold arrangements was 16%, 4%, and 15% respectively [522]. - Tritium received grant income from the Australian "JobKeeper" program during the fiscal years ended June 30, 2022, and 2021 [527]. Warranty and Liabilities - The estimated warranty costs for EV chargers are recognized as a liability when control of the goods is transferred to the customer [518]. - Tritium recognizes a warranty provision based on the present value of future cash flows estimated to settle the warranty obligation [539]. - Tritium's warranty provision is based on the estimated costs to settle obligations, with a potential increase or decrease of $0.6 million with a 10% change in the number of months of warranty remaining [579]. - Tritium's balance sheet includes customer advances and unearned revenue as contract liabilities [526]. Financial Performance - Tritium's sales in the second half of 2021 reached approximately $54.5 million, a significant increase from approximately $18.0 million in the first half of 2021 [565]. - The fair value of Tritium's ordinary shares was determined to be A$20.94 as of June 30, 2021, reflecting a reassessment due to the Business Combination Agreement [564]. Stock-Based Compensation - Stock-based compensation expense is recognized at the grant date for the Loan Funded Share Plan, as there are no service conditions attached [551]. - Tritium's stock-based compensation expense is recognized over the requisite service period, with a liability remeasured at each reporting period until settlement [555]. - The expected volatility for stock options granted in 2022 was estimated at 60%, compared to 40% in 2020 [556]. - Tritium's sensitivity analysis indicates that a +/-10% change in expected volatility could result in an increase/decrease of $0.47 million in incentive plan expenses and $0.16 million in ESS expenses [586]. Financial Risks and Estimates - Tritium's allowance for credit losses is assessed quarterly, with a sensitivity analysis indicating a potential increase or decrease of $0.03 million with a 10% change in the probability of default [573]. - A +/-100 basis points change in the discount rate could lead to an increase/decrease of $883,000 in finance costs [596]. - A +/-10% change in share price could result in an increase/decrease of $0.93 million in derivative fair value movement related to warrant expenses [590]. - A +/-2 year change in the useful life of plant and equipment could lead to an increase/decrease of $292,000 in depreciation expenses [588]. Internal Controls and Compliance - Tritium has identified material weaknesses in internal control over financial reporting, including lack of appropriate procedures and segregation of duties, which could lead to material misstatements [612]. - The company is implementing a remediation plan for identified weaknesses, including hiring additional accounting personnel and enhancing policies and controls [613]. - The company is not required to provide an auditor's attestation report on internal control over financial reporting due to its emerging growth company status [618]. Currency and Inflation Risks - Tritium's functional currency is USD, but it is exposed to foreign currency risk due to operations in AUD, EUR, and GBP [605]. - The company does not currently hedge foreign currency exchange risk but may consider it in the future [608]. - Inflation has increased product costs, but this has been offset by favorable foreign exchange rates and increased sales prices [609]. - The company has not experienced a material effect on its business from current inflation levels [609]. Accounting Standards and Growth Status - The company has elected to take advantage of the extended transition period for compliance with new financial accounting standards as an emerging growth company [615]. - The company will remain an emerging growth company until it has total annual gross revenue of at least $1.235 billion [619].
Tritium DCFC (DCFC) - 2022 Q4 - Annual Report