NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
(a) Real estate Revenue
Revenue comprises of the fair value of the consideration received or receivable for the sale and services in the ordinary course of the Company’s activities that is, sale of property or rental income. Revenue is shown net of value added tax.
(b) Hotel Revenue
It corresponds to all the revenues received from guests of owned and leased hotels. The services rendered (including room rentals, food and beverage sales and other ancillary services) are distinct performance obligations, for which prices invoiced to the guests are representative of their stand-alone selling prices. These obligations are fufilled over time when they relate to room rentals, along the stay in the hotel, and at a point in time for other goods and services, when they have been delivered or rendered.
Interest income and expense
Interest income and expense is recognised using the effective interest method.
Dividend income
Dividend income is recognised when the shareholder’s right to receive payment is established.
Unrealised gain or loss on financial asset at fair value through profit or loss
This item includes changes in the fair value of financial assets designated at fair value through profit or loss and excludes interest and dividend income and expenses.
Unrealised gains and losses comprise changes in the fair value of financial instruments for the year and from reversal of prior period’s unrealised gains and losses for financial instruments which were realised in the reporting period. Unrealised gains and losses are recognised in profit and loss as ‘Other income’.
Expenses recognition
Expenses are accounted for in profit or loss on an accruals basis.
3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Group’s accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be wrong. Detailed information about each of these estimates and judgements is included in other notes, where appropriate.
Valuation of investment properties
The Group/Company develops and sells residential property as well as owns investment property for which valuation of same can have material impacts on the amounts disclosed in the financial statements. The valuations are conducted by reputable external valuers based on best practice valuation methodologies.
Consulting contracts
The Company has a long-term consultancy contract (management contract) with its subsidiaries and the fees paid for these contracts are based amongst others, on a phase to completion basis on the overall estimated project cost. Both the phase to completion and overall estimated costs involve significant management judgement.
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