directors - The Lion Group

Property Development Activities
Property development revenue are recognised for all units sold using the percentage of completion method, by
reference to the stage of completion of the property development projects at the balance sheet date as measured
by the proportion that development costs incurred for work performed to-date bear to the estimated total property
development costs on completion.
When the outcome of a property development activity cannot be estimated reliably, property development revenue
is recognised to the extent of property development costs incurred that is probable of recovery.
Any anticipated loss on a property development project (including costs to be incurred over the defects liability
period), is recognised as an expense immediately.
Inventories of unsold completed development units are stated at the lower of cost and net realisable value.
Accrued billings represent the excess of property development revenue recognised in the income statement over
the billings to purchasers while advance billings represent the excess of billings to purchasers over property
development revenue recognised in the income statement.
Inventories
Trading merchandise, finished goods, work-in-progress, raw materials and other products are valued at the lower
of cost and net realisable value. Cost is determined principally on the ‘weighted average’ method. The cost of raw
materials comprise the original purchase price plus cost incurred in bringing the inventories to their present
locations and conditions. The cost of work-in-progress and finished goods comprise the cost of raw materials,
direct labour, direct charges and an appropriate proportion of production overheads.
Completed property units for sale are valued at the lower of cost and net realisable value. Cost is determined
using the ‘specific identification’ method.
Goods-in-transit are valued at the lower of cost and net realisable value.
Net realisable value represents the estimated selling price in the ordinary course of business less selling and
distribution costs and all other estimated costs to completion.
In arriving at net realisable value, due allowance is made for damaged, obsolete or slow moving inventories.
Construction Contracts
When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are
recognised by reference to the stage of completion of the contract activity at the balance sheet date, as measured
by the proportion that contract costs incurred for work performed to date bear to the estimated total contract
costs. Variations in contract work, claims and incentive payments are included to the extent that they have been
agreed with the customers.
When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the
extent of contract costs incurred that are probable of recovery. Contract costs are recognised as expenses in the
period in which they are incurred.
When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as
an expense immediately as an allowance for foreseeable loss.
Amount due from contract customers represents the excess of cost incurred todate and portion of profit or loss
attributable to work performed todate over progress billings while amount due to contract customers represents
the excess of progress billings over costs incurred todate and portion of profit or loss attributable to work performed
todate.
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