NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2024 3 MATERIAL ACCOUNTING POLICY INFORMATION (CONT’D) 3.8 Contract costs (cont’d) Capitalised contract costs are subsequently amortised on a systematic basis as the Group recognises the related revenue on the contract. An impairment loss is recognised in the profit or loss to the extent that the carrying amount of capitalised contract costs exceeds the expected remaining consideration less any directly related costs not yet recognised as expenses. 3.9 Contract assets and liabilities Contract assets primarily relate to the Group’s rights to consideration for work completed but not billed at the reporting date on construction of development properties. Contract assets are transferred to trade receivables when the rights become unconditional. This usually occurs when the Group invoices the customer. Contract liabilities primarily relate to: • advance consideration received from customers; and • progress billings issued in excess of the Group’s rights to the consideration. 3.10 Impairment (i) Non-derivative financial assets and contract assets The Group recognises loss allowances for expected credit losses (ECL) on: • financial assets measured at amortised cost (‘cash and cash equivalents’ and ‘trade and other receivables’); • debt investments measured at FVOCI (disclosed as part of ‘financial assets’; see note 10 for further details); • contract assets (as defined in SFRS(I) 15); • lease receivables; and • financial guarantee contracts (“FGCs”). Loss allowances of the Group are measured on either of the following bases: • 12-month ECL: these are ECL that result from default events that are possible within the 12 months after the reporting date (or for a shorter period if the expected life of the instrument is less than 12 months); or • Lifetime ECL: these are ECL that result from all possible default events over the expected life of a financial instrument or contract asset. Simplified approach The Group applies the simplified approach to provide for ECL for all trade receivables (including lease receivables) and contract assets. The simplified approach requires the loss allowance to be measured at an amount equal to lifetime ECL. General approach The Group applies the general approach to provide for ECL on all other financial instruments and FGCs. Under the general approach, the loss allowance is measured at an amount equal to 12-month ECL at initial recognition. ANNUAL REPORT 2024 FINANCIALS 115
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