Connecting the nation. and Beyond. - ChartNexus

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.25 SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segment, has been identified as the board of directors that makes strategic decisions.
Segment reporting is presented for enhanced assessment of the Group’s and of the Company’s risks and returns. Business
segments provide products or services that are subject to risk and returns that are different from those of other business
segments. Geographical segments provide products or services within a particular economic environment that is subject
to risks and returns that are different from those components operating in other economic environments.
Segment revenue, expense, assets and liabilities are those amounts resulting from the operating activities of a segment
that are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to the
segment. Segment revenue, expense, assets and liabilities are determined before intragroup balances and intragroup
transactions are eliminated as part of the consolidation process, except to the extent that such intragroup balances and
transactions are between group enterprises within a single segment.
3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated by the Directors and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the circumstances.
3.1 CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
The Group and the Company make estimates and assumptions concerning the future. The resulting accounting estimates
will, by definition, rarely equal the related actual results. To enhance the information content of the estimates, certain key
variables that are anticipated to have material impact to the Group’s and the Company’s results and financial position
are tested for sensitivity to changes in the underlying parameters. The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
outlined below:
(a) Impairment of development cost and property, plant and equipment
The Group carried out the impairment test based on a variety of estimation including value-in-use of the cash
generating unit (CGU) to which the development costs and property, plant and equipment are allocated. Estimating
the value-in-use requires the Group to make an estimate of the expected future cash flows from the CGU and also to
choose a suitable discount rate in order to calculate the present value of those cash flows.
(b) Revenue recognition
Property development and Construction Contracts
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The Group and the Company recognise property development revenue and expenses in the statement of comprehensive
income by using the stage of completion method. The stage of completion is determined by the proportion that
property development cost incurred for work performed to date bear to the estimated total property development
costs.
Significant judgement is required in determining the stage of completion, the extent of the property development
costs incurred, the estimated total property development revenue and costs, as well as the recoverability of the
development projects. In making the judgement, the Group evaluates based on past experience and by relying on the
work of specialists.