NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2023 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2023 13 DEVELOPMENT PROPERTIES Group Company 2023 2022 2023 2022 $’000 $’000 $’000 $’000 Properties under development, for which revenue is to be recognised over time 1,433,072 1,519,313 – – Properties under development, for which revenue is to be recognised at a point in time 1,966,926 3,100,118 – – Completed units 1,649,503 1,465,230 161,687 166,106 5,049,501 6,084,661 161,687 166,106 Allowance for foreseeable losses (171,509) (127,064) – – Total development properties 4,877,992 5,957,597 161,687 166,106 (i) Allowance for foreseeable losses Movements in allowance for foreseeable losses are as follows: Group Company Note 2023 2022 2023 2022 $’000 $’000 $’000 $’000 At 1 January 127,064 68,087 – – Allowance made 32 49,663 61,766 – – Allowance utilised (4,094) – – – Translation differences on consolidation (1,124) (2,789) – – At 31 December 171,509 127,064 – – The allowance for foreseeable losses is determined after taking into account estimated selling prices, estimated total construction costs and selling expenses. The estimated selling prices are based on recent selling prices for the development project or comparable projects and prevailing property market conditions. The estimated total construction costs are based on contracted amounts and, in respect of amounts not contracted for, management’s estimates of the amounts to be incurred taking into consideration historical trends of the amounts incurred. The allowance made for foreseeable losses is included in “cost of sales”. (ii) Development properties of the Group recognised as cost of sales, excluding allowance for foreseeable losses, amounted to $2,240,318,000 (2022: $1,081,031,000) for the year. (iii) Development properties of the Group with carrying amounts of $215,357,000 (2022: $565,080,000) are mortgaged to financial institutions to secure credit facilities (refer to note 22). 14 CONTRACT COSTS The amount relates to commission fees paid to property agents for securing sale contracts for the Group’s development properties. During the year, $23,638,000 (2022: $43,664,000) of commission fees paid were capitalised as contract costs. Capitalised commission fees are amortised when the related revenue is recognised. During the year, $66,302,000 (2022: $51,316,000) was amortised. There is no impairment loss in relation to such costs capitalised. 15 CONTRACT ASSETS/(LIABILITIES) Group Company 2023 2022 2023 2022 $’000 $’000 $’000 $’000 Contract assets 937,055 465,018 – – Contract liabilities (156,203) (613,598) – (8,190) Significant changes in the contract assets and the contract liabilities balances during the year are as follows: Group 2023 2022 $’000 $’000 Contract liabilities at the beginning of the year recognised as revenue during the year 565,008 278,174 Increases due to cash received, excluding amounts recognised as revenue during the year (111,364) (191,595) Contract assets reclassified to trade receivables (465,018) (402,324) Changes in measurement of progress 937,055 465,018 16 TRADE AND OTHER RECEIVABLES Group Company Note 2023 2022 2023 2022 $’000 $’000 $’000 $’000 Trade receivables 263,091 242,698 801 8,905 Impairment losses (20,444) (15,723) (150) (82) 242,647 226,975 651 8,823 Other receivables (a) 479,100 489,499 5,545 2,053 Impairment losses (380,857) (389,091) (985) (1,048) 98,243 100,408 4,560 1,005 Accrued rent receivables 49,198 49,671 111 2,778 Impairment losses (10,802) (19,914) – – 38,396 29,757 111 2,778 Deposits 13,585 5,911 278 288 Amounts owing by: – subsidiaries 7 – – 6,498,901 6,228,009 – associates 8 17,705 10,916 1,289 1,540 – joint ventures 9 1,266,133 1,086,805 194,411 232,414 – fellow subsidiaries 17 132 250 – – Reimbursement asset (b) – 59,505 – – 1,676,841 1,520,527 6,700,201 6,474,857 Prepayments 113,157 100,483 3,149 2,758 Grant receivables – 480 – – Tax recoverable 19,689 4,048 – – 1,809,687 1,625,538 6,703,350 6,477,615 FINANCIALS FINANCIALS ANNUAL REPORT 2023 CITY DEVELOPMENTS LIMITED 181 180
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