NOTES TO THE FINANCIAL STATEMENTS
31 December 2014
3.
Significant accounting estimates and judgments (cont’d)
3.2 Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period are
discussed below. The Group based its assumptions and estimates on parameters available when the financial statements were
prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes
or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur.
• Construction contracts
The Group recognises contract revenue based on the stage of completion method. The stage of completion is determined
based on surveys of work performed.
Significant judgment is required in determining the stage of completion, as well as the estimated total revenues and
costs. In making the judgment, the Group evaluates the stage of completion, the estimated total revenues and costs by
relying on past experience and the work of the project engineers.
The carrying amount of assets and liabilities arising from construction contracts at the end of each reporting period
are disclosed in Note 15 to the financial statements. If the estimated total contract cost had been 1% higher than
management estimate, the carrying amount of the assets and liabilities arising from construction contracts would have
been S$86,000 (2013: S$2,902,000) lower and S$1,657,000 (2013: S$4,115,000) higher respectively.
4.
Revenue
Group
2014
2013
(Restated)
S$’000
S$’000
Contract revenue
56,815
75,351
Revenue from sale of development property
(on completion basis)
192,988
–
Rental income from investment properties
10,668
10,139
Supply of labour and services provided
1,142
1,188
261,613
86,678
Hock Lian Seng Holdings Limited
Annual report 2014
66
