MKH Annual Report 2019

118 A N N U A L R E P O R T 2 0 1 9 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (e) Revenue recognition (Cont’d) (v) Sale of goods Revenue from sale of goods, crude palm oil and palm kernel is measured at fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognised by the Group at a point in time when control of the goods underlying the performance obligation is transferred to the buyers. (vi) Services Revenue from services is recognised as and when services are rendered. (vii) Entrance and subscription fees Entrance and subscription fees received from club members are recognised on an accrual basis. When members account become inactive, subscription fee is suspended until it is realised on a cash basis. Members’ accounts are deemed to be inactive where subscriptions are in arrears for more than 6 months. (viii) Rental income Rental income is recognised on a straight-line basis over the lease terms. (ix) Interest income Interest income is recognised on an accrual basis using the effective interest method. Interest income from hire-purchase financing, housing loan and term loan are recognised on an accrual basis as follows: (a) interest earned on hire-purchase financing is recognised using the ‘sum-of-digits’ method so as to produce a constant periodic rate of interest on the balance for each period. Unearned interest is deducted in arriving at the net balance of the hire-purchase debts; and (b) interest earned on housing loan and term loan is calculated on a monthly rest basis. (x) Dividend income Dividend income is recognised when the right to receive payment is established. (xi) Income from fixed income fund Income from fixed income fund is recognised when the right to receive payment is established. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2019