Notes to the Financial Statements Registration No. 200301030845 (633265-K) - 56 - 3. Significant Accounting Policies (Cont’d) (r) Revenue recognition (Cont’d) (i) Revenue from contracts with customers (Cont’d) (a) Revenue from construction contracts and project works (Cont’d) The Group provides warranties for general repairs of defects existed at the time of sale and do not give rise to a separate performance obligation. These assurance-type warranties are accounted for under MFRS 137 Provision, contingent Liabilities and Contingent Assets, please refer to accounting policy on warranty provisions in Note 3(p) to the financial statements. (b) Sale of goods Revenue is measured at the fair value of consideration received or receivable, net of returns and allowances, trade discount and volume rebates. Revenue from sale of goods is recognised when the transfer of significant risk and rewards of ownership of the goods to the customer which is at point in time upon the delivery of goods to the customers and customer acceptance, recovery of the consideration is probable and unconditional, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods. No significant element of financing is deemed present as the sales are made with a credit terms ranging from 1 to 90 days which are consistent with market practice. At the point of sale, a refund liability and a corresponding adjustment to revenue are recognised for those products expected to be returned. At the same time, it has a right to recover the product when customers exercise their right of return, so consequently recognises a right to returned goods asset and a corresponding adjustment to the cost of inventories recognised in profit or loss. The Group does not have such contract terms with its customers on right of return. A receivable is recognised by the Group when the goods are delivered as this represents the point in time at which the right to consideration is unconditional, because only the passage of time is required before payment is due. (c) Rendering of services Revenue from services and management fees are recognised in the reporting period in which the services are rendered, which simultaneously received and consumes the benefits provided by the Group, and the Group has a present right to payment for the services. 134 DESTINI BERHAD ANNUAL REPORT 2022
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