2020 UEM Edgenta Annual Report

2. SIGNIFICANT ACCOUNTING POLICIES (CONTD.) 2.4 Summary of significant accounting policies (contd.) w. Income recognition (contd.) Other income recognition i. Dividend income Dividend income is recognised when the Group’s right to receive payment is established. ii. Rental income Rental income is recognised on a straight-line basis over the term of the lease. iii. Interest income Interest income is recognised on an accrual basis using the effective interest method. x. Contract balances Contract assets A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group performs its obligation by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised. Contract assets are subject to impairment assessment based on the ECL model. Contract liabilities A contract liability is the obligation to transfer goods or services to a customer. If a customer pays consideration before the Group transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Group performs the obligations under the contract. Contract fulfillment assets Contract fulfillment assets are divided into: i. cost that give rise to an asset; and ii. costs that are expensed as incurred. W hen determining the appropriate accounting treatment for such costs, the Group firstly considers any other applicable standards. If those other standards preclude capitalisation of a particular cost, then an asset is not recognised under MFRS 15. UEM EDGENTA BERHAD 220 Financial Statements NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2020