Kimlun Corporation Berhad Annual Report 2018

2. Summary of significant accounting policies (cont'd) 2.21 Revenue from contracts with customers (cont'd) The Group satisfies a performance obligation and recognise revenue over time if the Group's performance: (i) Do not create an asset with an alternative use to the Group and have an enforceable right to payment for performance completed to-date; or (ii) Create or enhance an asset that the customer controls as the asset is created or enhanced; or (iii) Provide benefits that the customer simultaneously receives and consumes as the Company performs. For performance obligations where any one of the above conditions is not met, revenue is recognised at the point in time at which the performance obligation is satisfied. Revenue is measured at the fair value of consideration received or receivable. (a) Construction contracts The Group contracts with its customers for construction services. Revenue from construction contracts is recognised over time using the input method, which is based on the actual cost incurred to date on the construction project as compared to the total budgeted cost for the respective construction project. (b) Sale of goods The Group contracts with its customers for the sales of goods. Revenue from sale of goods is recognised at the point in time when control of the asset is transferred to the customer, generally upon the transfer of significant risk and rewards of ownership of the goods to the customer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods. (c) Sales of development properties under construction The revenue from development properties under construction is measured at the fixed transaction price agreed under the sale and purchase agreement. Revenue from development properties under construction is recognised as and when the control of the asset is transferred to the customer and it is probable that the Group will collect the consideration to which it will be entitled in exchange for the asset that will be transferred to the customer. Depending on the terms of the contract and the laws that apply to the contract, control of the asset may transfer over time or at a point in time. Control of the asset is transferred over time if the Group's performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. If control of the asset is transferred over time, revenue is recognised over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognised at a point in time when the customer obtains control of the asset. The Group recognises revenue over time using the input method, which is based on the actual cost incurred to date on the development properties as compared to the total budgeted cost for the respective development properties. (d) Sales of completed development properties Revenue relating to sale of completed development properties is recognised at a point in time when the control of the property has been transferred to the purchaser, being when vacant possession of the property has been delivered to the customer and it is probable that the Group will collect the consideration to which it will be entitled to in exchange for the asset sold. (e) Interest income Interest income is recognised on a time proportion basis that reflects the effective yield on the asset. Kimlun Corporation Berhad 85 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2018 (cont’d)