NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2.22 Revenue recognition (continued) (a) Revenue from contracts with customers (continued) (i) Contract revenue (continued) The progress towards complete satisfaction of the performance obligation is measured based on one of the following methods that best reflect the Group’s performance in satisfying the performance obligation: • direct measurements of the value transferred by the Group to the customer (eg. surveys of performance completed to date); or • the Group’s efforts or inputs to the satisfaction of the performance obligation (eg. by reference to cost incurred up to the end of the reporting period as a percentage of total estimated costs for complete satisfaction of the contract). (ii) Sales of goods The Group manufactures and sells a range of pipes for industrial use. The Group is also involved in the business of selling building materials, construction equipment, and power generators. Revenue from sales of goods are recognised at a point in time when control of the good is transferred to the customer upon delivery. (iii) Management fee Management fee is recognised on an accrual basis when service is rendered. (b) Revenue from other sources (i) Rental income Rental income is recognised on a straight line basis over the lease term. (ii) Dividend income Dividend income is recognised when the right to receive payment is established. (iii) Interest income Interest income is recognised on a time proportion basis, taking into account the principal outstanding and the effective interest rate applicable. 2.23 Government grants Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions, if any. Government grants related to income are recognised in profit or loss as ‘other operating income’ over the periods to match the related costs for which the grants are intended to compensate. 2.24 Borrowing costs Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditure and borrowing costs are incurred. Capitalisation of borrowing costs is suspended or ceased when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed. Wah Seong Corporation Berhad Annual Report 2022 126
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