NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2022 (cont’d) FINANCIAL STATEMENTS 2. Basis of preparation (CONT’D) (c) Significant accounting judgements, estimates and assumptions (cont’d) Judgements (cont’d) Satisfaction of performance obligations in relation to contracts with customers (cont’d) 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. Digital assets The Group has considered its position on the accounting for digital assets for the financial year ended 31 December 2022 and has determined that the Group’s digital assets fall into 3 categories: (i) Inventory method (historical method used by the Group); (ii) Intangible asset method (the method noted by the International Accounting Standard Board in its most recent deliberations); and (iii) Financial asset method (used where the digital asset meets the criteria of a financial assets). The Group notes that under the 3 methods noted above, the treatment continues to be to measure digital assets at fair value (unless otherwise disclosed and provided certain conditions are met) under the respective accounting standards. Fair value of digital assets Digital assets (including bitcoin inventory) is measured at fair value using the quoted in United States Dollar (“USD”) on from a number of different sources at closing Coordinated Universal Time. The Group considers this fair value to be a Level 1 input under the MFRS 13 Fair Value Measurement fair value hierarchy as the price on the quoted price (unadjusted) in an active market for identical assets. The Group uses a number of exchanges in order to provide the Group with appropriate size and liquidity to provide reliable evidence of fair value for the size and volume of transactions that are reasonably contemplated by the Group. Key sources of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period are set out below. Useful lives of property and equipment, investment properties and right-of-use (“ROU”) assets The Group and the Company regularly review the estimated useful lives of property and equipment, investment properties and ROU assets based on factors such as business plan and strategies, expected level of usage and future technological developments. Future results of operations could be materially affected by changes in these estimates brought about by changes in the factors mentioned above. A reduction in the estimated useful lives of property and equipment, investment properties and ROU assets would increase the recorded depreciation and decrease the value of property and equipment, investment properties and ROU assets. The carrying amount at the reporting date for property and equipment, investment properties and ROU assets are disclosed in Notes 4, 5 and 6 to financial statements. Development costs The Group and the Company capitalise development costs for a project in accordance with the accounting policy. Initial capitalisation of development costs is based on management’s judgement that technological and economic feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model. In determining the amounts to be capitalised, management makes assumptions regarding the expected future cash generations of the project, discount rates to be applied and the expected period of benefits. The carrying amount at the reporting date for development costs is disclosed in Note 7 to the financial statements. 163
RkJQdWJsaXNoZXIy NDgzMzc=