Annual Report 2019

ANNUAL REPORT 2019 163 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 March 2019 2. APPLICATION OF NEW AND AMENDMENTS TO HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”) (continued) HKFRS 15 Revenue from Contracts with Customers (continued) Summary of effects arising from initial application of HKFRS 15 (continued) Notes: (a) Taking into account the contract terms, business practice and the legal and regulatory environment in Singapore and Malaysia, the sales contracts in respect to the sales of properties provide the Group enforceable right to payment for performance completed to date with no alternative use of the properties by the Group and hence should be recognised over time upon application of HKFRS 15. At the date of initial application of HKFRS 15, the amount of additional revenue that would have been recognised in prior years in accordance with HKFRS 15 in relation to uncompleted contracts at that date amounted to HK$416,854,000, and this has been adjusted to customers’ deposits received. The related cost of sales amounted to HK$343,403,000 and finance cost previously capitalised amounted to HK$29,178,000 have been adjusted to properties under development. The finance cost incurred after the relevant properties are ready for intended sales is not eligible for capitalisation. The related deferred tax impact of HK$11,582,000 was recognised to deferred tax liabilities. The net impact of the above adjustments of HK$32,691,000 was recognised to retained profits, representing profits of HK$29,559,000 attributable to shareholders of the Company and profit of HK$3,132,000 attributable to non-controlling interests. (b) The Group incurred incremental commission paid/payable to intermediaries in connection with obtaining sales of properties contracts with customers. At the date of initial application of HKFRS 15, incremental costs of obtaining contracts of HK$60,599,000 which were previously expensed to the profit or loss related to contracts that are not completed as at 1 April 2018. This amount and the related deferred tax impact of HK$4,444,000 were recognised in retained profits and they are reclassified to contract costs and deferred tax liabilities respectively upon adoption of HKFRS 15. The remaining amount of HK$221,208,000 which was previously capitalised into properties for/under development was reclassified to contract costs upon adoption of HKFRS 15. (c) Advance proceeds received from customers relating to properties sales included as customer deposits received of HK$1,520,096,000 were reclassified to contract liabilities. The following tables summarise the impacts of applying HKFRS 15 on the Group’s consolidated statement of financial position as at 31 March 2019 and its consolidated statement of profit or loss and consolidated statement of cash flows for the current year for each of the line items affected. Line items that were not affected by the changes have not been included. Impact on the consolidated statement of financial position As reported Adjustments Amounts without application of HKFRS 15 Notes HK$’000 HK$’000 HK$’000 Current Assets Properties for sales – Properties under development (a), (b) 9,695,682 1,197,791 10,893,473 Contract assets (a) 215,565 (215,565) – Contract costs (b) 360,748 (360,748) – Capital and Reserves Retained profits (a) 8,644,396 (179,511) 8,464,885 Non-controlling interests (a) 219,186 (51,709) 167,477 Current Liabilities Customers’ deposits received (a), (c) – (1,867,289) (1,867,289) Contract liabilities (c) 974,166 (974,166) – Non-current Liabilities Deferred tax liabilities (a) 795,228 (40,425) 754,803