2. Summary of material accounting policies (cont’d.) 2.10 Inventories (cont’d.) (c) Unsold completed property units The cost of unsold completed property units is determined based on the specific idenঞficaঞon method, comprising the costs of land acquisiঞon including all related costs incurred subsequent to the acquisiঞon necessary to prepare the land for its intended use, related development costs to projects and direct building costs. (d) Club and hotel operating supplies Cost is determined using first-in, first-out and comprises food and beverage supplies. Net realisable value represents the esঞmated selling price for inventories less all esঞmated costs of compleঞon and costs necessary to make the sale. 2.11 Contract assets and liabilities A contract asset is the right to consideraঞon in exchange for goods or services transferred to the customer. If the Group performs by transferring goods or services to customer before the customer pays consideraঞon or before payment is due, a contract asset is recognised for the earned consideraঞon that is condiঞonal. Contract assets are subject to impairment assessment. A contract liability is the obligaঞon to transfer goods or services to a customer for which the Group has received consideraঞon (or an amount of consideraঞon is due) from the customer. If a customer pays consideraঞon before the Group transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabiliঞes are recognised as revenue when the Group performs under the contract. Unlike the method used to recognise contract revenue related to sale of completed property, the amounts billed to the customer for the sale of a property under development are based on achievement of the various milestones established in the contract. The amounts recognised as revenue for a given period do not necessarily coincide with the amounts billed to or cerঞfied by the customer. In the case of contracts in which the goods or services transferred to the customer exceed the related amount billed, the difference is recognised (as a contract asset) and presented in the statements of financial posiঞon under “Contract assets”, whereas in contracts in which the goods or services transferred are lower than the amount billed to the customer, the difference is recognised (as a contract liability) and presented in the statements of financial posiঞon under “Contract liabiliঞes”. 2.12 Contract cost assets (a) Costs to fulfil contracts with customers The costs incurred to fulfil contracts with customers of the Group mainly comprise of costs incurred for the development and construcঞon of its property development projects. (b) Incremental costs to obtain contracts with customers The incremental costs of obtaining a contract are those costs that the Group incurs to obtain a contract with a customer which they would not have incurred if the contract had not been obtained. Contract cost assets are presented as a current asset in the statements of financial posiঞon and its amorঞsaঞon is included in cost of sales in profit or loss. These costs are amorঞsed on a systemaঞc basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. notes to the financial statements 31 march 2025 (cont’d.) 169 MATRIX CONCEPTS HOLDINGS BERHAD INTEGRATED ANNUAL REPORT 2025 07 FINANCIAL STATEMENTS
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