45 AUDITED FINANCIAL STATEMENTS 2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (t) Revenue recognition (continued) (i) Revenue from contracts with customers (continued) Receivables, contract asset and contract liabilities A receivable is recognised when the goods are delivered or services are rendered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due. Contract asset is the right to consideration in exchange for goods or services that the Group has transferred to the customers. A contract asset is recognised when the services rendered by the Group exceed the amount already billed. Contract liability is the Group’s obligation to transfer goods or services to customers. A contract liability is recognised when the Group has received the sales consideration in advance or billings or payments by the customers exceed the services rendered by the Group. Contract cost The Group has elected the practical expedient to recognise incremental cost incurred to obtain contract with period of less than one year as an expense when incurred. (ii) Revenue from other sources Specific revenue recognition criteria for other revenue and income earned by the Group and Company are as follows: a) Rental income Rental income is recognised on a straight-line basis over the lease terms. b) Finance income Finance income is recognised using effective interest method. Finance income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for financial assets that subsequently become credit-impaired. For credit-impaired financial assets the effective interest rate is applied to the net carrying amount of the financial asset (after deduction of the loss allowance). c) Dividend income Dividend income from investments are recognised in profit or loss when the right to receive payment is established. This applies even if they are paid out of pre-acquisition profits. Dividends that clearly represents a recovery of part of the cost of an investment is recognised in other comprehensive income if it relates to an investment in equity instruments measured at FVOCI. d) Compensation receivable Compensation is estimated based on areas reclaimed by FELDA, recognised when vacant possession of the land is transferred.
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