perspective perspective - ChartNexus

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(m) Completed properties
123
Properties which have been completed but not sold are classified as “Completed properties” and are stated at the lower of
cost and net realisable value.
Net realisable value is the estimate of the selling price in the ordinary course of business, less the cost of completion and
selling expenses.
(n) Property development costs
Property development costs comprise cost of land and all costs directly attributable to development activities or that can be
allocated on a reasonable basis to those activities. It includes borrowing costs related to the financing of development
activities of the land, related development costs common to the development project and direct construction costs.
Borrowing costs are included in the property development costs until the completion of the development projects.
When the outcome of the development activities can be estimated reliably, property development revenue and expenses
are recognised by using the percentage of completion method as mentioned in Note 2(e) on revenue recognition.
When the outcome of the development activities cannot be estimated reliably, property development revenue is recognised
only to the extent of property development costs incurred that is probable will be recoverable; property development costs
on the development units sold are recognised when incurred.
Irrespective of whether the outcome of property development activities can or cannot be estimated reliably, when it is
probable that total property development costs will exceed total property development revenue, the expected loss is
recognised as an expense immediately.
Property development costs not recognised as an expense is recognised as an asset and is stated at the lower of cost and net
realisable value.
Where revenue recognised in the income statement exceeds billings to purchasers, the balance is presented as accrued
billings under “Trade and other receivables” (within current assets). Where billings to purchasers exceed revenue
recognised in the income statement, the balance is presented as progress billings under “Trade and other payables” (within
current liabilities).
(o) Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, when it
is probable that an outflow of resources will be required to settle the obligation, and when a reliable estimate of the amount
can be made.
(p) Share capital
(i) Classification
Ordinary shares are classified as equity. Distributions to holders of a financial instrument classified as an equity
instrument are charged directly to equity.
(ii) Share issue costs
Incremental external costs directly attributable to the issue of new shares are shown in equity as a deduction, net of
tax, from the proceeds.
(iii) Dividends to shareholders of the Company
Interim dividends on ordinary shares are recognised as liabilities when proposed.
Final dividend proposed after the balance sheet date is not recognised as a liability at the balance sheet date until its
approval by the shareholders at the Annual General Meeting.
UNITED MALAYAN LAND BHD