2. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED) (h) Provisions (continued) (i) Decommissioning costs (continued) Any change in the expected future cost, interest rate and inflation rate are reflected as an adjustment in the provision for decommissioning costs of the corresponding oil and gas asset. (ii) Other provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. The unwinding of the discount is recognised as finance cost. (i) Revenue and other income (i) Revenue Revenue is measured based on the consideration specified in a contract with a customer in exchange for transferring goods or services to a customer, excluding amounts collected on behalf of third parties. The Group or the Company recognises revenue when (or as) it transfers control over a product or service to a customer. An asset is transferred when (or as) the customer obtains control of the asset. The Group or the Company transfers control of a good or service at a point in time unless one of the following over time criteria is met: • the customer simultaneously receives and consumes the benefits provided as the Group or the Company performs; • the Group’s or the Company’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or • the Group’s or the Company’s performance does not create an asset with an alternative use and the Group or the Company has an enforceable right to payment for performance completed to date. (a) Sale of semiconductor wafers Revenue from sale of semiconductor wafers is recognised at the point of sale which coincides with when the Group transfers the control of the product to the customer. For contracts with customers which meet the no alternative use and the Group has rights to payment for work performed, revenue is recognised over time based on units-ofproduction method. Generally, assurance warranty of 12 months are given to customers. It is the Group’s policy to sell semiconductor wafers with a right of return within a specified period. Therefore, a right to the returned goods (included in trade receivables) are recognised for the goods expected to be returned by the customers. Accumulated experience is used to estimate such returns at the time of sale. The Group uses the expected value method to estimate goods that will not be returned in arriving at the amount of revenue. 137 Financial Statements DAGANG NeXCHANGE BERHAD Integrated Report 2024 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December 2024
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