2. Summary of material accounting policies (cont’d.) 2.9 Leases (cont’d.) (c) Short-term leases and leases of low-value assets The Group applies the short-term lease recogniঞon exempঞon to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase opঞon). It also applies the lease of low-value assets recogniঞon exempঞon to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-line basis over the lease term. 2.10 Inventories Inventories are stated at the lower of cost or net realisable value. (a) Land held for property development Land held for property development comprises of land banks which are in the process of being prepared for development but have not been launched, or where development acঞviঞes are not expected to be completed within the normal operaঞng cycle. Such land is classified within non-current assets. Costs incurred in bringing each property to its present locaঞon and condiঞon includes: (i) Freehold and leasehold rights for land, (ii) amounts paid to contractors for development, and (iii) planning and design costs, costs of site preparaঞon, professional fees for legal services, development overheads and other related costs. Land held for property development is reclassified to property development costs at the point when development acঞviঞes have commenced and where it can be demonstrated that the development acঞviঞes can be completed within the normal operaঞng cycle. (b) Property development costs Property acquired or being constructed for sale in the ordinary course of business, rather than to be held for rental or capital appreciaঞon, is held as development property. Principally, this is the property that the Group develops and intends to sell before, or on compleঞon of, development. Costs incurred in bringing each property to its present locaঞon and condiঞon includes: (i) Freehold and leasehold rights for land, (ii) amounts paid to contractors for development, and (iii) planning and design costs, costs of site preparaঞon, professional fees for legal services, development overheads and other related costs. When an inventory property is sold, the carrying amount of the property is recognised as an expense in the period in which the related revenue is recognised. The carrying amount of inventory property recognised in profit or loss is determined with reference to the directly aributable costs incurred on the property sold and an allocaঞon of any other related costs based on the relaঞve size of the property sold. notes to the financial statements 31 march 2025 (cont’d.) 168 MATRIX CONCEPTS HOLDINGS BERHAD INTEGRATED ANNUAL REPORT 2025 07 FINANCIAL STATEMENTS
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