Kimlun Corporation Berhad Annual Report 2019

Annual Report 2019 Kimlun Corporation Berhad NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2019 (cont’d) 104 2. Summary of significant accounting policies (cont'd) 2.21 Leases (cont'd) (a) Group as a lessee (cont'd) Recognition and measurement in financial year ended 31 December 2019 Recognition and measurement in financial year ended 31 December 2018 (b) Group as a lessor 2.22 Revenue from contracts with customers (i) (ii) (iii) Determine the transaction price. The transaction price is the amount of consideration in a contract to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. The Group recognises revenue from contracts with customers based on the five-step model as set out below: Identify contract with a customer. A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria that must be met. Identify performance obligations in the contract. A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer. The Group has recognised and measured its leases in accordance with MFRS 16 Lease effective from 1 January 2019. The financial impact to the Group’s financial statements on initial adoption of this Standard is disclosed in Note 2.2. Other than those assets previously classified as finance leases, all of the Group's leases are classified as operating leases. Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in revenue in the statements of comprehensive income due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.