Annual Report 2019

FAR EAST CONSORTIUM INTERNATIONAL LIMITED 164 For the year ended 31 March 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2. APPLICATION OF NEW AND AMENDMENTS TO HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”) (continued) HKFRS 15 Revenue from Contracts with Customers (continued) Impact on the consolidated statement of profit or loss As reported Adjustments Amounts without application of HKFRS 15 Notes HK$’000 HK$’000 HK$’000 Revenue (a) 6,842,319 (1,108,688) 5,733,631 Cost of sales and services (a) (3,835,645) 867,265 (2,968,380) Selling and marketing expenses (b) (165,509) (63,896) (229,405) Finance costs (a) (367,624) 33,674 (333,950) Income tax expense (a) (543,761) 40,425 (503,336) Profit attributable to non-controlling interests (a) 55,066 (51,709) 3,357 Impact on the consolidated statement of cash flows As reported Adjustments Amounts without application of HKFRS 15 Notes HK$’000 HK$’000 HK$’000 Operating activities Profit before tax (a)(b) 2,312,486 (271,645) 2,040,841 Finance costs (a) 367,624 (33,674) 333,950 Increase in properties for sale (a)(b) (2,896,967) (1,164,117) (4,061,084) Increase in contract assets (a) (215,565) 215,565 – Decrease in contract costs (a) 202,866 (202,866) – Decrease in customers’ deposits received (c) – 910,807 910,807 Decrease in contract liabilities (c) (545,930) 545,930 – Notes: (a) Under HKFRS 15, the Group recognised sale of properties over time with revenue amounted to HK$1,108,688,000, and this has been adjusted to customers’ deposits received and contract assets. The related cost of sales amounted to HK$867,265,000 and finance cost amounting to HK$33,674,000 have been adjusted to properties under development. The related deferred tax impact of HK$40,425,000 was recognised to deferred tax liabilities. The net impact of the above adjustments of HK$231,220,000 was recognised to retained profits, representing profits of HK$179,511,000 attributable to shareholders of the Company and profit of HK$51,709,000 attributable to non-controlling interests. (b) The incremental costs of obtaining contracts of HK$296,852,000 and HK$63,896,000 as at 31 March 2019 that would have been recognised in properties under development and selling and marketing expenses respectively under HKAS18 were reclassified to contract costs upon adoption of HKFRS 15. (c) Advance proceeds received from customers relating to properties sales included as customers’ deposits received of HK$974,166,000 were reclassified to contract liabilities.