NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
33
POSSIBLE IMPACT OF AMENDMENTS, NEW STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE FOR THE YEAR ENDED 31 DECEMBER 2017 (Continued)
HKFRS 15, Revenue from contracts with customers & chanted.
.
(iii)
When the entity's performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date.
If the contract terms and the entity's activities do not fall into any of these 3 situations, then under HKFRS 15 the entity recognises revenue for the sale of that good or service at a single point in time, being when control has passed. Transfer of risks and rewards of ownership is only one of the indicators that will be considered in determining when the transfer of control occurs.
The Group has assessed that revenue recognition for sales of properties is expected to be affected. Currently the Group's property development activities are carried out in Hong Kong only. Taking into account the contract terms, the Group's business practice and the legal and regulatory environment of Hong Kong, the Group has assessed that its property sales contracts will not meet the criteria for recognising revenue over time and therefore revenue from property sales will continue to be recognised at a point in time. Currently the Group recognises revenue from property sales upon the later of the signing of the sale and purchase agreement and the completion of the property development, which is taken to be the point in time when the risks and rewards of ownership of the property have been transferred to the customer. The Group has assessed that under the transfer-of-control approach in the new standard revenue from property sales will generally be recognised when the legal assignment is completed, which is the point in time when the customer has the ability to direct the use of the property and obtain substantially all of the remaining benefits of the property. This may result in revenue being recognised later than at present.
The Group plans to elect to use the retrospective method for the adoption of HKFRS 15 and will recognise the effect of initial application retrospectively to the each prior reporting period. The Group expects that the adjustment to be made upon the initial adoption of HKFRS 15 will not be material.
158
Hong Kong Ferry (Holdings) Company Limited Annual Report 2017
Page 160Page 161
No comments yet.
Private notes are available after approval.