Notes to the Financial Statements Registration No. 200301030845 (633265-K) - 30 - 2. Basis of Preparation (Cont’d) (c) Significant accounting judgements, estimates and assumptions The preparation of the Group’s and of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future. Judgements The following are the judgements made by management in the process of applying the Group’s and the Company’s accounting policies that have the most significant effect on the amounts recognised in the financial statements: Satisfaction of performance obligations in relation to contracts with customers The Group is required to assess each of its contracts with customers to determine whether performance obligations are satisfied over time or at a point in time in order to determine the appropriate method for recognising revenue. This assessment was made based on the terms and conditions of the contracts, and the provisions of relevant laws and regulations. The Group recognises revenue over time in the following circumstances: (a) The customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs; (b) The Group does not create an asset with an alternative use to the Group and has an enforceable right to payment for performance completed to date; and (c) The Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced. Where the above criteria are not met, revenue is recognised at a point in time. Where revenue is recognised at a point of time, the Group assesses each contract with customers to determine when the performance obligation of the Group under the contract is satisfied. 108 DESTINI BERHAD ANNUAL REPORT 2022
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