Page 252 - E-BOOK

b) Interest income on installment sale receivables

Since 1 January 2020, the Company has recognised interest on installment sale
receivables on an accrual basis throughout the contract period, based on the
outstanding principal balance and using the effective interest rate (Effective interest

method). The effective interest rate is the discount rate that estimates future cash flows
over the expected life of financial instrument. The Company continues to recognise

interest income net on installment sale receivables that later become credit-impaired
using the effective interest rate method, (the outstanding balance minus allowance for
expected credit losses). Subsequently, if the financial asset is no longer credit-impaired,

the Company reverts to calculating interest income on a gross carrying amount. (Prior
to 1 January 2020, the Company recognised interest on installment sale receivables on

a cash basis, using the effective interest rate).

The Company recognised gain on installment sale receivables when the aggregate
amount of cash received (principle plus accrued interest receivable) from the debtor is
greater than the cost of the properties for sale. The gain recognised is not to exceed the

aggregate amount of the cash received.
Annual Report 2020 c) Interest income from cash at financial institutions

Interest income from cash at financial institutions is recognised on an accrual basis and
on a time proportion basis, taking into account the actual returns.
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d) Interest and dividend income from investments

Interest on investments recognised as income on an accrual basis, taking into account
the effective interest rate. Dividend income on investments is recognised when the right
to receipt of dividend is established.

e) Gain (loss) on trading in securities

Gain (loss) on investment are recognised as income or expenses on the transaction
date.