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50 GoodLand Group Limited
2 Signifcant Accounting Policies (cont’d)
(q) Revenue Recognition (cont’d)
Construction Revenue
When the outcome of the construction contract can be estimated reliably, contract revenue and costs are
recognised in proft or loss in proportion to the stage of completion of the contract.
When the outcome of the construction contract cannot be estimated reliably, contract revenue is
recognised to the extent of contract costs incurred that are likely to be recoverable. When it is probable
that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense
immediately.
Contract revenue includes the initial amount agreed in the contract plus any variations in contract work
and claims, to the extent that it is probable that those additions will result in revenue and can be measured
reliably. The stage of completion of the contract is measured by reference to the surveys of work performed.
Rendering of Services
Revenue from the rendering of services, including management fees is recognised over the period in which
the services are rendered, by reference to completion of the specifc transaction assessed on the basis of
the actual service provided as a proportion of the total services to be performed.
Interest Income
Interest income, including income arising from fnance leases and other fnancial instruments, is recognised
on an accrual basis based on the effective interest method.
Rental Income
Rental income from operating leases (net of any incentives given to the lessees) is recognised on a straight-
line basis over the lease term.
Dividend Income
Dividend income is recognised when the right to receive payment is established.
(r) Income Taxes
Income tax expense represents the sum of the income tax currently payable and deferred income tax.
Income tax for current and prior periods is recognised at the amount expected to be paid to or recovered
from the tax authorities, using the tax rates and tax laws that have been enacted or substantially enacted
by the balance sheet date.
Deferred income tax is provided in full, using the liability method, on temporary differences at the balance
sheet date between the tax bases of assets and liabilities and their carrying amounts in the fnancial
statements.
Deferred tax assets and liabilities are recognised for all temporary differences, except:
- Where the deferred tax arises from the initial recognition of an asset or liability in a transaction that is
not a business combination and, at the time of the transaction affects neither the accounting proft nor
taxable proft or loss;
- In respect of temporary differences associated with investments in subsidiaries, where the timing of
the reversal of the temporary differences can be controlled by the Group and it is probable that the
temporary differences will not reverse in the foreseeable future; and
- In respect of deductible temporary differences and carry-forward of unutilised tax losses, if it is not
probable that taxable profts will be available against which those deductible temporary differences
and carry-forward of unutilised tax losses can be utilised.
Notes to the Financial Statements
30 September 2012