Annual Report 2015
FINANCIAL SECTION
125
3 PRINCIPAL ACCOUNTING POLICIES
(continued)
(w) Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services
rendered in the ordinary course of the Group’s activities. Revenue is shown net of value-added tax, returns,
rebates and discounts, allowances for credit and other revenue reducing factors after eliminating sales within
the Group.
Revenue is recognised when the amount can be reliably measured, it is probable that future economic benefits
will flow to the Group and specific criteria for each of the activities have been met. Estimates are based on
historical results, taking into consideration the type of customers, the type of transactions and the specifics of
each arrangement.
(i) Rental
Rental is recognised in the consolidated income statement on a straight-line basis over the lease term.
(ii) Property sales
Sale of properties is recognised when the risks and rewards of the properties are passed to the
purchasers. Deposits and installments received on properties sold prior to their completion are included in
current liabilities.
(iii) Construction revenue
Revenue from construction service contracts is recognised using the percentage of completion method
when the contracts have progressed to a stage where an outcome can be estimated reliably. Revenue
from construction service contracts is measured by reference to the proportion of costs incurred for work
performed to the end of the reporting period as compared to the estimated total costs to completion.
Anticipated losses on contracts are fully provided when it is probable that total contract costs will exceed
total contract revenue.
When the outcome of construction service contract cannot be estimated reliably, contract revenue is
recognised only to the extent of contract costs incurred that are likely to be recoverable.
(iv) Service fees
Property management service fee and property letting agency fee are recognised when services are
rendered.
(v) Infrastructure operations
Toll revenue from road and bridge operations, income from port operation, cargo, container handling and
storage are recognised when services are rendered.
(vi) Hotel operations
Revenue from hotel and restaurant operations is recognised upon provision of the services.
(vii) Department store operations
Sale of goods and merchandise is recognised upon delivery of goods.
Income from concessionaire sale is recognised upon the sale of goods and merchandise by the relevant
stores.
