3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (CONTINUED) 3.2 Key sources of estimation uncertainty (Continued) Measurement of lease liabilities Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term. The Group has determined the discount rate by reference to the Group’s incremental borrowing rate when the rate inherent in the lease is not readily determinable. The Group obtains the relevant market interest rate after considering the applicable geographical location where the lessee operates as well as the term of the lease. Management considers industry data available as well as any security available in order to adjust the market interest rate obtained from similar economic environment, term and value of the lease. The weighted average incremental borrowing rate applied to the Group’s lease liabilities as at 30 September 2025 was 4.6% (2024: 4.6%). The carrying amount of the Group’s lease liabilities as at 30 September 2025 was $4,106,000 (2024: $4,755,000) (Note 27). If the incremental borrowing rate had been 0.5% higher or lower than management’s estimates, the Group’s lease liabilities would have been lower or higher by $21,000 (2024: $24,000). Fair value measurement and valuation processes Some of the Group’s assets and liabilities are measured at fair value for financial reporting and disclosures purposes. In estimating the fair value of an asset or a liability, the Group uses market observable data to the extent it is available. The Group works closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model. For unquoted equity shares, the Group determines the fair value with reference to SFRS(I) 13 Fair Value Measurement to establish the appropriate valuation techniques and inputs to the model. Changes in assumptions on the inputs to the model could affect the reported fair value of the financial instruments. Information about the valuation techniques and inputs used in determining the fair values is included in Notes 16 and 36 to the financial statements. The carrying amounts of the Group’s assets measured at fair value as at 30 September 2025 are included in Notes 16 to the financial statements. 4. REVENUE Group 2025 2024 $’000 $’000 Construction contracts – over time 182,368 172,597 The disaggregation of revenue from contracts with customers is as follows: Buildings and Construction 2025 2024 $’000 $’000 Geographical markets(a) Singapore 181,896 172,177 Maldives 472 420 182,368 172,597 Timing of revenue recognition Services transferred overtime 182,368 172,597 (a) The disaggregation is based on the location of customers from which revenue was generated. ANNUAL REPORT 2025 KEONG HONG HOLDINGS LIMITED 87 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2025
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