DESTINI Annual Report 2018

3. Significant Accounting Policies (Cont’d) (r) Revenue recognition (Cont’d) (i) Revenue from contracts with customers (Cont’d) The Group recognises revenue from the following major sources: (a) Revenue from construction contracts The Group recognises revenue from construction contracts over time when control over the asset has been transferred to the customers. The assets have no alternative use to the Group due to contractual restriction and the Group has an enforceable right to payment for performance completed to date. Revenue from construction contracts is measured at the transaction price agreed under the construction contracts. Revenue is recognised over the period of the contract using the output method to measure the progress towards complete satisfaction of the performance obligations under the construction contract, based on technical milestone defined under the contract and take into account the level of completion of the physical proportion of contract work to date, certified by professional consultants. The Group becomes entitled to invoice customers for construction of promised asset based on achieving a series of performance-related milestones (i.e. progress billing). The Group previously have recognised a contract asset for any work performed. Any amount previously recognised as a contract asset is reclassified to trade receivables at the point at which it is invoiced to the customer. If the progress billing exceeds the revenue recognised todate, the Group recognises a contract liability for the difference. There is not considered to be a significant financing component in contracts with customers as the period between the recognition of revenue and the progress billing is always less than one year. (b) Sale of goods Revenue from sale of goods is recognised when control of the products has transferred, being the goods are delivered to the customers. Revenue is recognised based on the price specified in the contract, net of the rebates, discounts and taxes. Payment of the transaction price is due immediately at the point the customer purchases the goods. (c) Rendering of services Revenue from services and management fees are recognised in the reporting period in which the services are rendered, which simultaneously received and consumes the benefits provided by the Group, and the Group has a present right to payment for the services. (ii) Rental income Rental income is accounted for on a straight-line basis over the lease terms. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis. (iii) Interest income Interest income is recognised on accruals basis using the effective interest method. DESTINI BERHAD ANNUAL REPORT 2018 133