Annual Report 2012 - IOI Group

5. SIGNIFICANT ACCOUNTING POLICIES (Continued)5.18 Revenue Recognition (Continued)5.18.2 Property developmentRevenue from property development is recognised based on the “percentage of completion” method in respect ofall units that have been sold. The stage of completion is determined based on the proportion of propertydevelopment costs incurred for work performed up to the reporting period over the estimated total propertydevelopment costs.When the outcome of a development activity cannot be reliably estimated, the property development revenue shallbe recognised only to the extent of property development costs incurred that is probable to be recoverable andproperty development costs on the development units sold are recognised as an expense in the period in whichthey are incurred.Any expected loss on a development project, including costs to be incurred over the defects liability period, isrecognised immediately in profit or loss.5.18.3 Construction contractsRevenue from work done on construction contracts is recognised based on the “percentage of completion” method.The stage of completion is determined based on the proportion of contract costs incurred for work performed upto the reporting period over the estimated total contract costs.When the outcome of a construction contract cannot be estimated reliably, contract revenue shall be recognisedonly to the extent of contract costs incurred that is probable to be recoverable and contract costs are recognisedas an expense in the period in which they are incurred.When it is probable that total contract costs will exceed total contract revenue, the foreseeable loss is recognisedas an expense immediately.5.18.4 Dividend incomeDividend income is recognised when shareholder’s right to receive payment is established.5.18.5 Rental incomeRental income from investment properties is recognised based on the accruals basis.5.18.6 Interest incomeInterest income is recognised in profit or loss as it accrues.5.18.7 Club membership license feeClub membership license fees, which are not refundable, are recognised as income when received.5.18.8 Management feesManagement fees are recognised when services are rendered.Annual Report 2012IOI CORPORATION BERHAD 149