Annual Report 2019

FAR EAST CONSORTIUM INTERNATIONAL LIMITED 192 For the year ended 31 March 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 3. SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue from contracts with customers (upon application of HKFRS 15 in accordance with transition in note 2) (continued) Sales of properties (continued) For the progress towards complete satisfaction of a performance obligation that is recognised over time, revenue is recognised based on the stage of completion of the contract using the input method. The Group’s sales contracts with customers include payment schedules which require stage payments over the construction period once certain specified milestones are reached. A contract asset is recognised over the period in which the construction services are performed representing the Group’s right to consideration for the services performed because the rights are conditioned on the Group’s future performance in achieving specified milestones. The contract assets are transferred to trade debtors when the rights become unconditional. The Group receives deposits from customers when they sign the sale and purchase agreement. Deposits received on properties sold prior to the date of revenue recognition are recorded as contract liabilities under current liabilities. A contract liability represents the Group’s obligation to transfer goods or services to a customer from which the Group has received consideration (or an amount of consideration is due) from customer. Hotel operations and management, car park operations and facilities management, property management services As the customers simultaneously receive and consume the benefit provided by the Group’s performance as the Group performs, the Group recognises the service fee received or receivable from the customers as its revenue over time using output method, which is to recognise revenue on the basis of direct measurements of the value of the goods or services transferred to the customer to date relative to the remaining goods or services promised under the contract, that best depict the Group’s performance in transferring control of goods or services. Gaming and related operations Gaming revenue is the aggregate net difference between gaming wins and losses. The Group accounts for gaming revenue on a portfolio basis given the similar characteristics of wagers by recognising net win per gaming day. Incremental costs of obtaining a contract Incremental costs of obtaining a contract are those costs that the Group incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. The Group recognises such costs (property sales commissions) as an asset if it expects to recover these costs. The asset so recognised is subsequently amortised to profit or loss on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the assets relate. The Group applies the practical expedient of expensing all incremental costs to obtain a contract if these costs would otherwise have been fully amortised to profit or loss within one year.