Investor Presentaiton
HKAS 1.51(a)
HKAS 1.49
HK Listco Ltd
Financial statements for the year ended 31 December 2023
However, in cases that the customers agree to pay the balance of the consideration early while the
construction is still ongoing, contract liabilities are being recognised throughout the remaining
property construction period for the full amount of the contract price. In addition, the contract
liability will be increased by the amount of interest expense being accrued by the group which
would increase the amount of revenue recognised when control of the completed property is
transferred to the customer (see note 1(aa)(i)(b)).
Movements in contract liabilities²11
HKFRS 15.116(a)
HKFRS 15.116(b)
Balance at 1 January
HKFRS 15.116(a)
HKAS 1.61
HKFRS 15.116-118
211
HKFRS 15.116(b)
Decrease in contract liabilities as a result of recognising revenue during the year
that was included in the contract liabilities at the beginning of the period
2023
2022
$'000
$'000
7,173
6,298
(3,536)
(3,873)
Increase in contract liabilities as a result of billing in advance of construction and
manufacturing activities
3,689
1,206
Increase in contract liabilities as a result of receiving forward sales deposits and
instalments during the year in respect of properties still under construction as at
the year
end
4,916
3,024
Increase in contract liabilities as a result of accruing interest expense on advances
(note 5(a))
Balance at 31 December
985
518
13,227
7,173
The amount of contract liabilities expected to be recognised as income after more than one year is
$3,014,000 (2022: $1,774,000). All of the other contract liabilities are expected to be recognised as
income within one year 202.
As noted in footnotes 207 and 209, HKFRS 15 requires entities to disclose the opening and closing balances of contract assets and
liabilities, to explain how the timing of satisfaction of their performance obligations relates to the typical timing of payment and the
effect that those factors has on the contract asset and contract liability balances, and to disclose any significant changes in contract
assets and liabilities balances during the period.
In addition, paragraph 116(b) of HKFRS 15 explicitly requires disclosure of the amount of revenue recognised in the reporting period
that was included in the contract liability balance at the beginning of the period. For this reason, rather than providing narrative
explanation about the significant changes, entities may find it simpler to provide a reconciliation of the opening and closing contract
liability balances, as is illustrated here, to satisfy the disclosure requirements. Such reconciliation is not required and other
approaches may be acceptable, provided that the required disclosures are provided.
133
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