156 MKH BERHAD | ANNUAL REPORT 2023 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 recognized 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 recognized as and when services are rendered. (vii) Entrance and subscription fees Entrance and subscription fees received from club members are recognized 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 recognized on a straight-line basis over the lease terms. (ix) Interest income Interest income is recognized on an accrual basis using the effective interest method. Interest income from hire-purchase financing, housing loan and term loan are recognized on an accrual basis as follows: (a) interest earned on hire-purchase financing is recognized 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 recognized when the right to receive payment is established. (xi) Income from short-term placement Income from short-term placement is recognized when the right to receive payment is established. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2023
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