200901023978 (867077-X) Kimlun Corporation Berhad (Incorporated in Malaysia) 2. Summary of significant accounting policies (cont'd) 2.14 Inventories - Raw materials: purchase costs on a first-in first-out basis. - - 2.15 Contract cost assets (a) Incremental costs of obtaining contracts (b) Costs to fulfil a contract The Company recognises incremental costs of obtaining contracts with customers as an asset when the Company expects to recover these costs. When the amortisation period of the asset is one year or less, such costs are recognised as an expense immediately when incurred. The Company recognises costs that relate directly to a contract (or an anticipated contract) with customer as an asset when the costs generate or enhance resources of the Company, will be used in satisfying performance obligation in the future and are recovered. The contract cost assets are initially measured at cost and amortised on a systematic basis that is consistent with the pattern of revenue recognition to which the asset relates. An impairment loss is recognised in the profit or loss when the carrying amount of the contract cost assets exceeds the expected revenue less expected cost that will be incurred. Any impairment loss recovered shall be reversed to the extent of the carrying amount of the contract cost assets does not exceed the amount that would have been recognised had there been no impairment loss recognised previously. Completed properties : cost is determined on the specific identification basis and comprises cost associated with the acquisition of land, construction costs and appropriate proportion of development overheads. Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale. Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their present location and condition are accounted for as follows: Finished goods: costs of direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. These costs are assigned on a first-in first-out basis. - 41 - NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 Annual Report 2022 106
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