PRG Holdings Berhad Annual Report 2019

ANNUAL REPORT 2019 147 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2019 cont’d 18. PROPERTY DEVELOPMENT COSTS Group 2019 2018 RM’000 RM’000 Property development costs at beginning of financial year: - leasehold land 144,958 144,958 - development costs 141,015 112,113 - accumulated cost recognised in profit or loss (102,337) (67,544) 183,636 189,527 Costs incurred during the financial year: - development costs 6,038 28,902 Costs recognised in profit or loss during the financial year: - leasehold land (198) (8,119) - development costs 8,585 (26,674) 8,387 (34,793) Reclassification to assets held for sale (Note 26): - leasehold land (123,389) - - development costs (135,850) - - accumulated cost recognised in profit or loss 91,107 - (168,132) - Property development costs at end of financial year: - leasehold land 21,569 144,958 - development costs 11,203 141,015 - accumulated cost recognised in profit or loss (2,843) (102,337) 29,929 183,636 (a) Leasehold land represents costs incurred as a consequence of having right-of-use assets to produce inventories during the financial year in accordance with MFRS 102 Inventories . (b) Included in the leasehold land under development is a piece of land provided by Almaharta Sdn. Bhd. (“ASB”), a third party, pursuant to the Joint Venture Agreement (“JVA”) dated 31 December 2013 for the development in Wilayah Persekutuan, Kuala Lumpur. Pursuant to the JVA, ASB agreed to receive the purchase consideration of the leasehold land on a deferred payment basis progressively subject to the fulfilment of the conditions precedent contained in the JVA. All conditions precedent in accordance to the JVA had been fulfilled and the JVA was deemed unconditional with effect from 30 July 2014. In the previous financial year, the Group has accrued the remaining amount of RM10,031,000 payable to ASB for the purchase consideration of the leasehold land as disclosed in Note 24(c)(i) to the financial statements. During the financial year, the leasehold land has been reclassified to assets held for sale.