ANNUAL REPORT 2025 153 NOTES TO THE FINANCIAL STATEMENTS 2 Basis of preparation and material accounting policy information (Continued) (z) Leases (Continued) (i) Assets leased to the Group (Continued) - any initial direct costs; and - restoration costs. Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in the income statement. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise equipment and small items of offi ce furniture. (ii) Assets leased out by the Group A lease is classifi ed as a fi nance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classifi ed as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. Income received under operating leases net of any incentives provided to the leasing company are credited to the income statement on a straight-line basis over the lease periods. (aa) Revenue and other income recognition Revenues are recognised when or as the control of the good or service is transferred to the customer. Depending on the terms of the contract and the laws that apply to the contract, control of the good or service may be transferred over time or at a point in time. Control of the good or service is transferred over time if the Group’s performance provides all of the benefi ts received and consumed simultaneously by the customer. If control of the asset transfers over time, revenue is recognised over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognised at a point in time when the customer obtains control of the asset. The progress towards complete satisfaction of the performance obligation is measured based on direct measurements of the value transferred by the Group to the customer. Transaction price of a contract shall be allocated to individual performance obligation (or distinct good or service). The objective when allocating the transaction price is for an entity to allocate the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the entity expects to be entitled in exchange for transferring the promised goods or services to the customer. Revenue is recognised over time: (i) for ports and related services, transportation and logistics solutions along with the progress when service is rendered; and (ii) for management and service fee income, and system development and support fees along with the progress when service is rendered. Interest income is recognised over time on a time proportion basis using the eff ective interest method. (ab) Government grant Subsidy from the government is recognised at their fair values where there is a reasonable assurance that the subsidy will be received and the Group will comply with all attached conditions. The amounts are recognised within “other operating income” in the income statement.
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