perspective perspective - ChartNexus

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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(e) Revenue recognition (cont’d)
Gross dividends from investments are taken up in the financial statements when the Company’s right to receive payment
is established.
The following income is recognised on a receivable basis:
- quarry lease rental, land lease rental and rental from properties.
- management fees and project management fees.
- interest income.
Interest on overdue amounts receivable from house buyers is recognised in the income statement as it accrues.
An allowance for doubtful debts is made when the collectibility of this interest is in doubt.
(f) Construction contracts
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognised
over the period of the contract as revenue and expenses respectively. The Group uses the percentage of completion method
to determine the appropriate amount of revenue and costs to recognise in a given period; the stage of completion is
measured by reference to the proportion that the contract costs incurred for work performed to date bear to the estimated
total costs for the contract.
When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to the extent
of contract costs incurred that is probable will be recoverable; contract costs are recognised as expenses in the financial year
in which they are incurred.
Irrespective of whether the outcome of a construction contract can or cannot be estimated reliably, when it is probable that
total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
The aggregate of the costs incurred and the profit/loss recognised on each contract is compared against the progress billings
up to the end of the financial year. Where costs incurred and recognised profits (less recognised losses) exceed progress
billings, the balance is shown as an amount due from customer on construction contracts under trade and other receivables.
Where progress billings exceed costs incurred plus recognised profits (less recognised losses), the balance is shown as an
amount due to customer on construction contracts under trade and other payables.
(g) Property, plant and equipment
Freehold land is stated at cost or valuation.
Freehold land is not depreciated as it has an infinite life.
The freehold land was revalued by the Directors based on professional valuations carried out by independent professional
valuers. The Directors have applied the transitional provision issued by Malaysian Accounting Standards Board on adoption
of FRS 1162004 “Property, Plant and Equipment” (formerly known as MASB 15), which allows these assets to be stated at their
1990 and 1996 valuations. Accordingly, the valuations have not been updated.
Surpluses arising on revaluation are credited to non-distributable revaluation reserves. Deficits arising on revaluation are
charged against non-distributable revaluation reserves to the extent of previous surpluses credited to non-distributable
revaluation reserves of the same asset. In all other cases, a decrease in carrying amount is charged to the income statement.
All other property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
All other property, plant and equipment are depreciated on a straight line basis over their estimated useful lives,
summarised as follows:
Buildings 5%
Furniture, fittings and equipment 20% - 33.33%
Motor vehicles 20%
Plant and machinery 20%
Stable and equestrian equipment 20%
for the financial year ended 31 December 2005