Registration No. 200301030845 (633265-K) - 54 - 3. Material Accounting Policies (Cont’d) (q) Revenue recognition (i) Revenue from contracts with customers The Group recognises revenue from contracts with customers in accordance with MFRS 15 when control of goods or services is transferred to the customer, which may occur over time or at a point in time. Advance payments received from customers are recorded as Contract Liabilities until performance obligations are satisfied and supported by completion or acceptance documentation. The Group and the Company recognise revenue from the following major sources: (a) 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 control of the goods has been transferred 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. At the point of sale, a refund liability and a corresponding adjustment to revenue are recognised for those products expected to be returned. At the same time, it has a right to recover the product when customers exercise their right of return, so consequently recognises a right to returned goods asset and a corresponding adjustment to the cost of inventories recognised in profit or loss. The Group does not have such contract terms with its customers on right of return. A receivable is recognised by the Group when the goods are delivered as this represents the point in time at which the right to consideration is unconditional, because only the passage of time is required before payment is due. (b) 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. DESTINI BERHAD ANNUAL REPORT 2025 137
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