MKH BERHAD | ANNUAL REPORT 2023 155 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (e) Revenue recognition (Cont’d) The control of the promised goods or services may be transferred over time or at a point in time. The control over the goods or services is transferred over time and revenue is recognized over time if: • the customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs; • the Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or • the Group’s performance does not create an asset with an alternative use and the Group has an enforceable right to payment for performance completed to date. Revenue for performance obligation that is not satisfied over time is recognized at the point in time at which the customer obtains control of the promised goods or services. (i) Development properties The Group recognizes revenue from property development over time if it creates an asset with no alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. Revenue is recognized over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. The progress towards complete satisfaction of the performance obligation is measured based on the Group’s efforts or inputs to the satisfaction of the performance obligation (i.e. by reference to the property development costs incurred to date as a percentage of the estimated total costs of development of the contract). (ii) Sale of completed properties Revenue from sale of completed properties is recognized at a point in time upon the finalisation of sale and purchase agreements and when the control of the properties has been passed to the customers. (iii) Sale of investment properties Revenue from sale of investment properties is measured at fair value of the consideration received or receivable. Revenue is recognized when the control of the ownership has been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of investment properties can be estimated reliably, and there is no continuing management involvement with the properties. (iv) Construction contracts Revenue from rendering of services relating to construction contracts is recognized over time based on efforts or inputs to the satisfaction of the performance obligation. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2023
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