55
Annual Report 2015
TEHO INTERNATIONAL INC LTD.
3 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.10 Employee benefits (cont’d)
(iii) Share-based payment transactions
The grant date fair value of equity-settled share-based payment awards granted to
employees is recognised as an employee expense, with a corresponding increase
in equity, over the period that the employees unconditionally become entitled to the
awards. The amount recognised as an expense is adjusted to reflect the number
of awards for which the related service and non-market performance conditions
are expected to be met, such that the amount ultimately recognised as an expense
is based on the number of awards that meet the related service and non-market
performance conditions at the vesting date. For share-based payment awards with
non-vesting conditions, the grant date fair value of the share-based payment is
measured to reflect such conditions and there is no true-up for differences between
expected and actual outcomes.
The fair value of the amount payable to employees in respect of share appreciation
rights, which are settled in cash, is recognised as an expense with a corresponding
increase in liabilities, over the period that the employees become unconditionally
entitled to payment. The liability is remeasured at each reporting date and at settlement
date based on the fair value of the share appreciation rights. Any changes in the fair
value of the liability are recognised as employee benefits expense in profit or loss.
3.11 Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The unwinding
of the discount is recognised as finance cost.
A provision for levies is recognised when the condition that triggers the payment of the levy
as specified in the relevant legislation is met.
3 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.12 Revenue
(i) Sale of goods
Revenue from the sale of goods in the course of ordinary activities is measured at the
fair value of the consideration received or receivable, net of returns, trade discounts and
volume rebates. Revenue is recognised when significant risks and rewards of ownership
have been transferred to the customer, recovery of the consideration is probable, the
associated costs and possible return of goods can be estimated reliably, there is no
continuing management involvement with the goods, and the amount of revenue can
be measured reliably. If it is probable that discounts will be granted and the amount can
be measured reliably, then the discount is recognised as a reduction of revenue as the
sales are recognised.
The timing of the transfer of risks and rewards varies depending on the individual terms
of the sales agreement.
(ii) Revenue from development properties
Revenue from sales of properties under development is recognised by reference to
the stage of completion using the percentage of completion method when the Group
determines that (a) control and the significant risks and rewards of ownership of the
work-in-progress transfer to the buyer in its current state as construction progresses, (b)
the sales price is fixed and collectible, (c) the percentage of completion can be measured
reliably, (d) there is no significant uncertainty as to the ability of the Group to complete the
development, and (e) costs incurred or to be incurred can be measured reliably.
In all other instances, revenue from sales of development properties is only recognised
upon the transfer of control and significant risks and rewards of ownership of the property
to the buyer. This generally coincides with the point in time when the development unit is
delivered to the buyer. No revenue is recognised when there is significant uncertainty as
to the collectability of consideration due or the possible return of units sold.
The percentage of completion is measured by reference to the work performed,
based on the stage of completion as certified by the independent architects or
quantity surveyors for the individual units sold. Profits are recognised only in respect
of finalised sales contracts to the extent that such profits relate to the progress of the
construction work. An expected loss on a contract is recognised immediately in profit
or loss.
NOTES TO THE
FINANCIAL STATEMENTS
Year ended 30 June 2015
