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CHAIRMAN’S DELIVERING MSM MANAGEMENT DISCUSSION GROUP FINANCIAL
STATEMENT VALUE OVERVIEW & ANALYSIS REPORT

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(o) Revenue recognition (continued)
(i) Revenue from contracts with customers (continued)
• Revenue from rendering services
Revenue from rendering services including management fees are recognised when the services are performed
by reference to completion of the specific services.
Transportation services performed after the transfer of control of sales of goods from the sugar operation to
customers are regarded as a separate performance obligation and recognised over time depending on the terms
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of the contract.
• Receivables, contract asset and contract liabilities
MSM MALAYSIA HOLDINGS BERHAD Annual Report 2020
A receivable is recognised when the goods are delivered or services are rendered as this is the point in time that
the consideration is unconditional because only the passage of time is required before the payment is due.
• Contract cost
During the previous financial year, the Group has elected the practical expedient to recognise incremental
contract cost of obtaining contract with period of less than one year as an expense when incurred.
(ii) Revenue from other sources
Specific revenue recognition criteria for other revenue and income earned by the Company are as follows:
(a) Rental income - recognised on a straight-line basis over the lease terms
(b) Finance income - recognised using effective interest method

Finance income is calculated by applying the effective interest rate to the gross carrying amount of a financial
asset except for financial assets that subsequently become credit-impaired. For credit-impaired financial assets
the effective interest rate is applied to the net carrying amount of the financial asset (after deduction of the
loss allowance).
(c) Dividend income

Dividend income from investments are recognised in profit or loss when the right to receive payment is
established. This applies even if they are paid out of pre-acquisition profits.
Dividends that clearly represents a recovery of part of the cost of an investment is recognised in other
comprehensive income if it relates to an investment in equity instruments measured at FVOCI.
(p) Dividend distribution
Dividends on ordinary shares are recognised as liabilities when proposed or declared before the statement of financial
position date. A dividend proposed or declared after the statement of financial position date, but before the financial
statements are authorised for issue, is not recognised as a liability at the reporting date.