Investor Presentaiton
HKAS 1.51(a)
HKAS 1.49
HK Listco Ltd
Financial statements for the year ended 31 December 2023
(d)
Contract assets and contract liabilities 102
A contract asset is recognised when the group recognises revenue (see note 1(aa)(i)) before being
unconditionally entitled to the consideration under the terms in the contract. Contract assets are
assessed for ECLs (see note 1(n)(i)) and are reclassified to receivables when the right to the
consideration becomes unconditional (see note 1(q)).
A contract liability is recognised when the customer pays non-refundable consideration before the
group recognises the related revenue (see note 1(aa)(i)). A contract liability is also recognised if the
group has an unconditional right to receive non-refundable consideration before the group
recognises the related revenue. In such latter cases, a corresponding receivable is also recognised
(see note 1(q)).
When the contract includes a significant financing component, the contract balance includes interest
accrued under the effective interest method (see note 1(aa)(i)).
HKFRS 7.21
(q)
Trade and other receivables
HKFRS 15.105-
109
102
(r)
A receivable is recognised when the group has an unconditional right to receive consideration and
only the passage of time is required before payment of that consideration is due.
Trade receivables that do not contain a significant financing component are initially measured at
their transaction price. Trade receivables that contain a significant financing component and other
receivables are initially measured at fair value plus transaction costs. All receivables are
subsequently stated at amortised cost (see note 1(n)(i)).
Insurance reimbursement is recognised and measured in accordance with note 1(z).
Software-as-a-service (SaaS) arrangement costs
A SaaS arrangement is a service arrangement where the group has a right to access to the supplier's
application software running on the supplier's cloud infrastructure during the term of the
arrangement, but not control over the underlying software asset.
Costs to implement a SaaS arrangement, including those incurred in configuring or customising the
access to the supplier's application software, are evaluated to determine if they give rise to a
separate asset that the group controls. Any resulting asset is recognised and accounted for in
accordance with the policy for intangible assets as set out in note 1(I). Implementation costs that do
not give rise to an asset are recognised in profit or loss as incurred, which may be over the period
the configuration or customisation services are received to the extent that such services are distinct
from the SaaS, or over the term of the SaaS arrangement to the extent the configuration or
customisation services are not distinct from the SaaS.
Payment made in advance of receiving the related services is recognised as prepayment.
The descriptions "contract asset", "contract liability" and "receivable" are based on the specific requirements in paragraphs 105 to
109 of HKFRS 15. According to paragraph 109 of HKFRS 15, an entity is not prohibited from using alternative descriptions for these
items provided that sufficient information is given to users of financial statements to enable them to distinguish between the
items. See also footnote 208 for a discussion about the differences between these items.
64
© 2023 KPMG, a Hong Kong partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited ("KPMG International"),
a private English company limited by guarantee. All rights reserved.View entire presentation