Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023 2 MATERIAL ACCOUNTING POLICIES (CONTINUED) 2.22 Revenue recognition (continued) (a) Revenue from contracts with customers (continued) Specific revenue recognition criteria for each of the Group’s activities are as described below: (i) Contract revenue Contract revenue with customers include contracts relating to pipe coating, manufacturing of boilers and steam turbines as well as engineering and fabrication services. These contracts may include multiple performance obligations as they are not highly integrated. Hence, the transaction price will be allocated to each performance obligation based on the standalone selling price. Where the contracts are highly integrated, they are recognised as a single performance obligation. Revenue is recognised progressively based on the progress towards complete satisfaction of the performance obligation. Revenue are recognised over time when control of the asset is transferred over time when the Group’s performance: • creates and enhances an asset that the customer controls as the services are being performed; or • 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. 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. 187 Wasco Berhad
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