Frontken Corporation Berhad 200401012517 (651020-T) • ANNUAL REPORT 2022 90 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) Operating Segments Operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. Revenue from Contracts with Customers and Other Income (i) Revenue from Contracts with Customers Revenue is recognised by reference to each distinct performance obligation in the contract with customer and is measured at the consideration specified in the contract of which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, net of sales and service tax, returns, rebates and discounts. The Group recognises revenue when (or as) it transfers control over a product or service to customer. An asset is transferred when (or as) the customer obtains control of that asset. The Group transfers control of goods or services at a point in time unless one of the following overtime criteria is met: • The customer simultaneously receives and consumes the benefits provided as the Group performs. • The Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced. • The Group’s performance does not create an asset with an alternative use and the Group has an enforceable right to payment for performance completed to date. Sale of Goods Revenue from sale of goods is recognised when the Group has transferred control of the goods to the customer, being when the goods have been delivered to the customer and upon its acceptance. Following delivery, the customer has full discretion over the manner of distribution and price to sell the goods, and bears the risks of obsolescence and loss in relation to the goods. A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
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