Positioning for the Future | 131
Appendix
Notes to the Financial Statements
Year ended 31 December 2014
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(cont’d)
2.15 Revenue recognition
Rental income
Rental income receivable under operating leases is recognised on a straight-line basis over the term of the
lease, except where an alternative basis is more representative of the pattern of benemts to be derived from
the leased asset. Lease incentives granted are recognised as an integral part of the total rental income to be
received. Contingent rentals are recognised as income in the accounting period in which they are earned.
Development properties for sale
The Group recognises income on property development projects when the signimcant risks and rewards of
ownership have been transferred to the purchasers. For development projects under progressive payment
scheme in Singapore, whereby the legal terms in the sale contracts result in continuous transfer of work-in-
progress to the purchasers, revenue is recognised based on the percentage of completion method. Under
the percentage of completion method, promt is brought into promt or loss only in respect of sales procured and
to the extent that such promt relates to the progress of construction work. The progress of construction work
is measured by the proportion of the construction costs incurred to date to the estimated total construction
costs for each project. For development projects under deferred payment scheme in Singapore and overseas
development projects, the revenue will be recognised upon the transfer of signimcant risks and rewards of
ownership, which generally coincides with the time the development units are delivered to the purchasers.
Revenue excludes goods and services or other sale taxes and is after deduction of any trade discounts.
No revenue is recognised if there are signimcant uncertainties regarding recovery of the consideration due,
associated costs or the possible return of unit sold.
Financial advisory and management fee
Financial advisory and management fee is recognised as and when the service is rendered.
Dividends
Dividend income is recognised on the date that the Group’s right to receive payment is established.
Interest income
Interest income is recognised as it accrues, using the effective interest method.
2.16 Finance costs
Borrowing costs are recognised in the promt or loss using the effective interest method, except to the extent
that they are capitalised as being directly attributable to the acquisition, construction or production of an
asset which necessarily takes a substantial period of time to be prepared for its intended use or sale.
2.17 Tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the promt or
loss except to the extent that it relates to a business combination, or items recognised directly in equity or
in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax
rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect
of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for mnancial reporting purposes and the amounts used for taxation purposes. Deferred tax is not
recognised for
t
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable promt or loss;
t
temporary differences related to investments in subsidiaries, associates and joint ventures to the extent
that the Group is able to control the timing of the reversal of the temporary difference and it is probable
that they will not reverse in the foreseeable future; and
t
taxable temporary differences arising on the initial recognition of goodwill.
