UEM EDGENTA BERHAD ANNUAL REPORT 2021 1 2 3 4 5 6 7 215 214 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 2. SIGNIFICANT ACCOUNTING POLICIES (CONTD.) 2.4 Summary of significant accounting policies (contd.) (w) Income recognition (contd.) Revenue from contracts with customers (contd.) (iv) Property and Facility Solutions The Group provides various facilities management including infrastructure, building and ground maintenance to commercial customers. These services are provided on a time and material basis or as a fixed-priced contract, with contract terms generally ranging from one (1) year to three (3) years. Revenue from these services is recognised over time in the period the services are rendered. The Group also provides green technology and sustainability services in retro-fitting works of buildings followed by a period in which the Group maintains and services the infrastructure. In such contracts, revenue from the supply of retro-fitting equipment and installation works are recognised at the point in time when: (i) the control of the asset is transferred to the customer upon the acceptance of physical possession of the asset and successful testing and commissioning; and (ii) the significant risks and rewards of ownership of the asset is borne by the customer. Revenue from the maintenance and servicing of the infrastructure subsequent to the retro-fitting is recognised over time in the period the services are rendered. (v) Property development Revenue from sale of property development is recognised over time. Revenue from sale of completed property units is recognised at the point of time upon the control of the asset is transferred to the customer and it is probable that the Group will collect the consideration to which it entitled in exchange for the asset that will be transferred to the customer. (vi) Management fees Management fees for services provided to entities within the Group are recognised over time as services are rendered. 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.
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