91 GHL SYSTEMS BERHAD 199401007361 (293040-D) ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2021 CONT’D 5. REVENUE (Cont’d) Revenue is measured at the fair value of the consideration received or receivable, net of discounts and rebates. Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction would flow to the Group, and the amount of revenue and the cost incurred or to be incurred in respect of the transaction can be reliably measured and specific recognition criteria have been met for each of the activities of the Group as follows: (a) Sales of value-added solutions Revenue from sale of services rendered except for maintenance income is recognised at a point in time when the services has been rendered to the customer and coincides with the delivery of services and acceptance by customers. There is no significant financing component in the revenue arising from services rendered as the services are made on the normal credit terms not exceeding twelve (12) months. Maintenance income is accounted over time as and when the services are rendered and accepted by customers. (b) Sales of goods Revenue from sale of goods is recognised at a point in time when the goods have been transferred to the customer and coincides with the delivery of products and acceptance by customers. There is no right of return and warranty provided to the customers on the sale of goods. There is no significant financing component in the revenue arising from sale of goods as the sales are made on the normal credit terms not exceeding twelve (12) months. (c) Sales of prepaid airtime top-ups The Group, being a distributor in the sales of prepaid airtime top-ups, is in substance acting as an agent for the operators. The revenue associated with the sales of prepaid airtime top-ups to end-users is recognised on a net basis, which represents the margin earned. The revenue is recognised at a point in time when the sales of prepaid airtime top-ups have been transferred to the customer and coincides with the delivery of prepaid airtime top-ups and acceptance by customers. The details of the prepaid airtime top-ups are as follows: Group 2021 2020 RM RM Sales of prepaid airtime top-ups: Gross billing 2,097,986,871 1,813,546,693 Cost of purchase from telecommunication service providers (1,995,580,722) (1,723,354,247) 102,406,149 90,192,446 (d) Rental of EDC equipment Rental income is accounted for on a straight-line basis over the lease term of an ongoing lease. The aggregate cost of incentives provided to the lessee is recognised as reduction of rental income over the lease term on a straight-line basis.
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