NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2022 (CURRENCY - SINGAPORE DOLLARS UNLESS OTHERWISE STATED) B2 Revenue (continued) Key estimates and judgement: Revenue recognition Judgement is applied in determining: • whether performance obligations are distinct. Requires an assessment of whether the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer and if the promise is separately identifiable from other promises in the contract. • the transaction price for contracts with variable consideration (e.g. bonus, liquidated damages, penalties, etc). Requires an evaluation of potential risk and factors which may affect completion or delivery of the contract, in accordance with contract obligations. • estimated cost to complete. For revenue recognised over time, the percentage of completion is assessed by reference to the contract costs incurred till date in proportion to the total estimated costs for each contract. In making the estimates, management relies on the expertise of its project team and past experience of completed projects. The estimated total costs are reviewed regularly and adjusted where necessary, with the corresponding effect of the change being recognised prospectively from the date of change. B3 Profit from operations Profit from operations are arrived at after charging the following items (excluding those disclosed in the other notes to the financial statements): Group 2022 $’000 2021 $’000 After charging/(crediting) Auditors’ remuneration - auditors of the Company 2,721 2,418 - other auditors # 2,661 1,863 Non-audit fees - auditors of the Company 533 75 - other auditors # 17 132 Fees paid to a firm of which a director is a member 498 1,119 Research, design and development expenses * 131,183 92,826 Allowance for inventory obsolescence 32,265 45,861 Short-term lease expense 15,304 10,712 Low-value assets lease expense 1,948 2,320 Property, plant and equipment written off 3,844 2,249 Gain on disposal of associate (3,668) – Fair value changes of investment in associates (1,471) (11,154) # Includes the network of member firms of PricewaterhouseCoopers International Limited (PwCIL) * Amount before government grants of $5,397,000 (2021: $6,886,000) 152 ST ENGINEERING ANNUAL REPORT 2022
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