Pg 147 - Berjaya Corporation Berhad

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Berjaya Land Berhad (201765-A) 54 Annual Report 2005 Notes To The Financial Statements 30 April 2005 2 SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (p) Financial Instruments (Cont’d) (iii) Payables Trade and other payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received. (iv) Interest-Bearing Borrowings Interest-bearing bank loans and overdrafts are recorded at the amount of proceeds received. Borrowing costs directly attributable to the acquisition, construction or production of assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale is capitalised as part of the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. The amount of borrowings costs eligible for capitalisation is determined by applying a capitalisation rate which is the weighted average of the borrowing costs applicable to the Group’s borrowings that are outstanding during the year, other than borrowings made specifically for the purpose of obtaining another qualifying asset. For borrowings made specifically for the purpose of obtaining a qualifying asset, the amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of that borrowing. All other borrowing costs are recognised as an expense in the income statement in the period in which they are incurred. (v) 5% Irredeemable Convertible Unsecured Loan Stocks 1999/2009 (“ICULS 1999/2009”) Irredeemable Convertible Unsecured Loans Stocks with fixed coupon rate are regarded as compound instruments, consisting predominantly equity component, and a liability component. ICULS 1999/2009 were issued pursuant to a Debt Conversion exercise undertaken by the Company in 1999. The Company granted a put option to certain financial institutions to purchase 100% of the ICULS 1999/2009 issued to the financial institutions or such number of ICULS 1999/2009 remaining with the financial institutions exercisable within a prescribed period as explained in Note 22 to the financial statements. Arising from the above and as permitted under the transitional provision of MASB 24: Financial Instruments: Disclosure and Presentation, the ICULS 1999/2009 component parts have not been classified separately and accordingly have been classified as long term liabilities. (vi) Equity Instruments Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are approved for payment. (q) Revenue Recognition (i) Investment Income Dividend income from investments in subsidiary and associated companies is recognised when the rights to receive the dividend payment are established. Dividend income from other investments is recognised on a receipt basis. Interest income from short term deposits, irredeemable convertible unsecured loan stocks and advances are recognised on an accrual basis. (ii) Development Properties Revenue from sale of development properties is accounted for by the stage of completion method in respect of all building units that have been sold.
Berjaya Land Berhad (201765-A) Annual Report 2005 55 2 SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (q) Revenue Recognition (Cont’d) (iii) Enrolment Fees 60% of the enrolment fees from members joining the vacation club are recognised as income upon signing of the membership agreements and the remaining 40% is treated as deferred membership fees which are recognised over the membership period. Enrolment fees from members joining the golf and other clubs are recognised as income upon signing of the membership agreements. (iv) Gaming Activity Revenue from gaming activity is recognised based on ticket sales, net of gaming tax relating to draw days within the financial year. In the current financial year, the subsidiary company, Natural Avenue Sdn Bhd, conducting this activity has been deconsolidated arising from the dilution of the Group’s equity interest in Matrix International Berhad as explained in Note 39(5) to the financial statements. (v) Gaming Equipment Sale Revenue from the sale of gaming equipment is recognised net of discounts upon delivery of products and customer acceptance. In the current financial year, the subsidiary company, Natural Avenue Sdn Bhd, conducting this activity has been deconsolidated arising from the dilution of the Group’s equity interest in Matrix International Berhad as explained in Note 39(5) to the financial statements. (vi) Royalty Revenue Royalty revenue from lottery operations is recognised on an accrual basis. In the current financial year, the subsidiary company, Sublime Cartel Sdn Bhd, conducting this activity has been deconsolidated arising from the dilution of the Group’s equity interest in Matrix International Berhad as explained in Note 39(5) to the financial statements. (vii) Rental Income Rental income, including those from investment properties and hotel operations, is recognised, on the accrual basis unless recoverability is in doubt, in which case, it is recognised on a receipt basis. (viii) Revenue from Water Theme Park Operations Entrance fee to the water theme park is recognised when tickets are sold. Revenue from the sale of food and beverage is recognised based on invoiced value of goods sold. (ix) Revenue from Casino Operations Revenue is recognised on a receipt basis and is stated net of gaming tax. (x) Sale of Goods, Property Inventories and Services Revenue is recognised when significant risks and rewards of ownership of the goods and property inventories have been passed to the buyer. Revenue from services rendered is recognised upon its completion. Revenue is recognised net of service tax and discount, where applicable. (xi) Management Fee and Share Administration Fee Income Management fee and share administration fee income are recognised on an accrual basis. (r) Cash and Cash Equivalents Cash comprises cash in hand, at bank and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash subject to insignificant risk of changes in value, against which the bank overdrafts, if any, are deducted.
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Pg 147 - Berjaya Corporation Berhad

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