ENRA Group Berhad | Annual Report 2022 142 NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2022 24. REVENUE (CONT’D) (d) Revenue from property development and construction contracts Contracts with customers include multiple promises to customers and therefore accounted for as separate performance obligations. In this case, the transaction price will be allocated to each performance obligation based on the stand-alone selling prices. When these are not directly observable, they are estimated based on expected cost plus margin. Revenue from property development and construction contracts is measured at the fixed transaction price agreed under the agreement. Revenue is recognised as and when control of the asset is transferred to the customer and it is probable that the Group would collect the consideration to which it will be entitled in exchange for the asset that would be transferred to the customer. Depending on the terms of the contract and the laws that apply to the contract, control of the asset may transfer over time or at a point in time. Control of the asset is transferred over time if the performance of the Group does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. If control of the asset transfers over time, revenue is recognised over the period of the contract using the input method by reference to the cost incurred relative to the total expected cost for satisfaction of that performance obligation. Otherwise, revenue is recognised at a point in time when the customer obtains control of the asset. Significant judgement is required in determining performance obligations, transaction price allocation and costs in applying the input method to recognise revenue over time. The Group identifies performance obligations that are distinct and material, which is judgmental in the context of contract. Transaction prices were determined based on estimated margins prior to its allocation to the identified performance obligation. The Group also estimated total contract costs in applying the input method to recognise revenue over time. (d) Leasing Lease income from operating lease is accounted for on a straight line basis over the lease term of an ongoing lease. While lease income from finance lease is accounted for on a straight line basis over the lease term of an ongoing lease and subsequently transfer the ownership of the asset to the lessee. (e) Sale of completed properties The Group recognises sales at a point in time for the sale of completed properties, when the control of the properties has been transferred to the purchasers, being when the properties have been completed and delivered to the customers and it is probable that the Group will collect the considerations to which it would be entitled to in exchange for the assets sold. There is no significant financing component in the revenue arising from sale of completed properties as the sales are made on the normal credit terms not exceeding twelve months. (f) Dividend income Dividend income is recognised when the right to receive payment is established.
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