2018 UEM Edgenta Annual Report

2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D.) 2.4 Summary of significant accounting policies (cont’d.) (x) Income recognition (cont’d.) Revenue from contracts with customers (cont’d.) (iii) Infrastructure services The Group provides maintenance service and repair of civil, mechanical and electrical works on roads, infrastructure and expressways works. Revenue on infrastructure services are recognized over time, using an input method to measure progress towards complete satisfaction of the service, because customer simultaneously receives and consumes the benefits provided by the Group. Revenue is calculated as the proportion of total contract value which costs incurred to date to total expected costs for that contract. Revenue derived from variations on contracts are recognised only when they have been accepted by the customer. Full provision is made for losses on all contracts in the year in which they are first foreseen. Revenue for routine maintenance is recognised based on fixed sum contract while revenue for non routine maintenance is recognised based on schedule of rates agreed with customers. (iv) Property and Facility Solutions The Group provides various facilities management including infrastructure, building and ground maintenance to commercial customers. These services are provided on a time and material basis or as a fixed-priced contract, with contract terms generally ranging from one (1) year to three (3) years. Revenue from these services is recognised over time in the period the services are rendered. The Group also provides green technology and sustainability services in retro-fitting works of buildings followed by a period in which the Group maintains and services the infrastructure. In such contracts, revenue from the supply of retro-fitting equipment and installation works are recognised at the point in time when: (i) the control of the asset is transferred to the customer upon the acceptance of physical possession of the asset and successful testing and commissioning; and (ii) the significant risks and rewards of ownership of the asset is borne by the customer. Revenue from the maintenance and servicing of the infrastructure subsequent to the retro-fitting is recognised over time in the period the services are rendered. (v) Property development Revenue from sale of property development is recognised over time. Revenue from sale of completed property units is recognised at the point of time upon the control of the asset is transferred to the customer and it is probable that the Group will collect the consideration to which it entitled in exchange for the asset that will be transferred to the customer. Financial Review Stakeholder Information AGM Information 179 Governance Review of Sustainability Activities