NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2023 (CONT’D) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 4.10 INVENTORIES (CONT’D) Inventories are stated at the lower of cost and net realisable value. Cost and net realisable value are determined as below (Cont’d): (c) Completed Properties Held for Sale The cost is determined by apportionment of the total development costs for that development project, attributable to the unsold properties. The cost of completed properties held for sale comprises cost associated with the acquisition of land, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less the estimated costs necessary in selling the property. (d) Club and Hotel Operating Supplies Cost is determined using first-in, first-out method and comprises food and beverage supplies. Net realisable value is the estimated selling price in the ordinary course of business, less the applicable variable selling expenses. 4.11 COSTS TO SECURE CONTRACTS Incremental Costs of Obtaining A Contract The Group recognises incremental costs of obtaining contracts with customers as an asset when the Group expects to recover these costs. When the amortisation period of the asset is one year or less, such costs are recognised as an expense immediately when incurred. The costs to secure contracts are initially measured at cost and amortised on a systematic basis that is consistent with the pattern of revenue recognition to which the asset relates. An impairment loss is recognised in the profit or loss when the carrying amount of the costs to secure contracts exceeds the expected revenue less expected cost that will be incurred. Any impairment loss recovered shall be reversed to the extent of the carrying amount of the costs to secure contracts does not exceed the amount that would have been recognised had there been no impairment loss recognised previously. 4.12 CONTRACT ASSET AND CONTRACT LIABILITY A contract asset is recognised when the Group’s right to consideration is conditional on something other than the passage of time. A contract asset is subject to impairment requirements of MFRS 9. A contract liability is stated at cost and represents the obligation of the Group to transfer goods or services to a customer for which consideration has been received (or the amount is due) from the customers. INTEGRATED ANNUAL REPORT 2023 MATRIX CONCEPTS HOLDINGS BERHAD 165
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