DESTINI Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS 3. Significant Accounting Policies (Cont’d) (r) Revenue recognition (Cont’d) (i) Revenue from contracts with customers (Cont’d) The Group and the Company recognise revenue from the following major sources: (a) Revenue from construction contracts and project works The Group recognises revenue fromconstruction contracts and project works over time by reference to the progress towards complete satisfaction at the end of the reporting period 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 and project works is measured at the transaction price agreed under the construction contracts and project works. Progress towards complete satisfaction is measured based on input method, which is to recognise revenue on the basis of the Group’s efforts or inputs to the satisfaction of a performance obligation (i.e. contracts costs incurred for works performed to date) relative to the total expected inputs to the satisfaction of that performance obligation (i.e. total estimated contract cost), that best depict the Group’s performance in transferring control of goods or services. The progress towards complete satisfaction of the performance obligations under the construction contract is based on technical milestone defined under the contract and taken 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. The Group provides warranties for general repairs of defects existed at the time of sale. These assurance-type warranties are accounted for under MFRS 137 Provision, contingent Liabilities and Contingent Assets , please refer to accounting policy on warranty provisions in Note 3(p) to the financial statements. (b) Sale of goods Revenue is measured at the fair value of consideration received or receivable, net of returns and allowances, trade discount and volume rebates. Revenue from sale of goods is recognised when the transfer of significant risk and rewards of ownership of the goods to the customer which is at point in time upon the delivery of goods to the customers and customer acceptance, recovery of the consideration is probable and unconditional, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods. No significant element of financing is deemed present as the sales are made with a credit terms ranging from 1 to 90 days which are consistent with market practice. (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. FINANCIAL STATEMENTS 06 ANNUAL REPORT 2019 127