CAHYA MATA SARAWAK ANNUAL REPORT 2016

121 Cahya Mata Sarawak Berhad A N N U A L R E P O R T 2 0 1 6 Section 07 Financial StatementS NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2016 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) 2.25 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 expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale. All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs consist of interest and other costs that theGroup and the Company incurred in connectionwith the borrowing of funds. 2.26 Revenue Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the Company and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable. (a) Sale of goods Revenue from sale of goods is recognised net of discounts upon the transfer of significant risks and rewards of ownership of the goods to the customer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of consideration due, associated costs or the possible return of goods. (b) Revenue from services Revenue from services is recognised upon performance of services. (c) Construction contracts Revenue from construction contracts is accounted for by the stage of completion method as described in Note 2.15. (d) Development properties (i) Sale of completed development property A development property is regarded as sold when the significant risks and rewards have been transferred to the buyer, which is normally on unconditional exchange of contracts. For conditional exchanges, sales are recognised only when all the significant conditions are satisfied. (ii) Sale of development property under construction Where development property is under construction and agreement has been reached to sell such property when construction is completed, the directors consider whether the contract comprises: - A contract to construct a property; or - A contract for the sale of completed property • Where a contract is judged to be for the construction of a property, revenue is recognised using the percentage of completion method as construction progresses. • Where the contract is judged to be for the sale of a completed property, revenue is recognised when the significant risks and rewards of ownership of the real estate have been transferred to the buyer (i.e. revenue is recognised using the completed contract method).