Notes to the Financial Statements
31 December 2015
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2.22 Revenue
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revenue can be reliably measured, regardless of when the payment is made. Revenue is measured at the fair
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excluding taxes or duty. The Group assesses its revenue arrangements to determine if it is acting as principal or
agent. The Group has concluded that it is acting as a principal in all of its revenue arrangements. The following
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(i)
Contract revenue
Revenue from contract services is recognised by reference to the stage of completion when it can
be measured reliably. The stage of completion is determined based on professional surveys of work
performed.
Where the outcome cannot be measured reliably, revenue is recognised only to the extent of the expenses
recognised that are recoverable.
(ii)
Sales of completed development properties and development properties under construction
Revenue from sales of completed development properties and development properties under construction
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to the buyer (i.e. revenue is recognised using the completed contract method). If, however, the legal terms
of the contract are such that the construction represents the continuous transfer of work in progress to
the purchaser, the percentage of completion method of revenue recognition is applied and revenue is
recognised as work progresses.
In Singapore context, INT FRS 115 Agreements for the Construction of Real Estate includes an accompanying
note on application of INT FRS 115 in Singapore which requires the percentage of completion method
of revenue recognition to be applied to the sale of private residential properties in Singapore prior
to completion of the properties that are regulated under the Singapore Housing Developers (Control
and Licensing) Act (Chapter 130) and uses the standard form of sale and purchase agreements (SPAs)
prescribed in the Housing Developers Rules. The accompanying note to INT FRS 115 does not address
the accounting treatment for other SPAs, including SPAs with a Deferred Payment Scheme feature in
Singapore.
In the case whereby the percentage of completion method is used, the percentage of work completed
is measured based on the costs incurred up until the end of the reporting period as a proportion of
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performed as construction progresses.
(iii)
Rental income
Rental income arising from the investment properties are recognised on a straight-line basis over the
period of the lease.
(iv)
Interest income
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(v)
Dividend income
Dividend income is recognised when the Group’s right to receive payment is established.
(vi)
Supply of labour and services provided
Revenue from supply of labour and services provided is recognised upon service rendered.
HOCK LIAN SENG HOLDINGS LIMITED
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