NOTES TO THE FINANCIAL STATEMENTS 4. Revenue (continued) Accounting Policy (continued) Definition of terms Contract asset: An entity’s right to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditional on something other than the passage of time (for example, the entity’s future performance). Contract liability: An entity’s obligation to transfer goods or services to a customer for which the entity has received consideration from the customer. When the Group enters into sale and purchase contracts for properties or sale contracts for services other than tenancy agreements, if the performance obligations fulfilled by the Group exceed the total payments received to date, a contract asset is recognised; if the total payments received to date exceed the performance obligation fulfilled, a contract liability is recognised. Deposits received upon signing of sale and purchase contracts, or sale contracts are recognised as contract liabilities. Direct costs incurred to obtain a contract are capitalised if the Group expects to recover those costs. Costs of obtaining a contract are amortised on a straight-line basis over the expected life of the contract. The Group has elected to adopt the practical expedient to expense such direct costs to profit or loss since the period of amortisation is generally one year or less with no material impact to the Group. Contract asset and contract liability are defined in HKFRS 15 “Revenue from Contracts with Customers”. These two terms do not apply to rental income from lease agreements, which is specifically excluded from the scope of HKFRS 15. Revenue represents sales by the Company and its subsidiary companies to external customers and comprises: 2022 2021 HK$M HK$M Restated Gross rental income from investment properties 12,226 12,879 Property trading 921 2,443 Hotels 565 894 Rendering of other services 114 102 13,826 16,318 2022 2021 HK$M HK$M Revenue recognised in the current reporting period that was related to the contract liability balance at the beginning of the year 120 4 Of the contract liabilities of HK$14 million outstanding at 31st December 2022 (2021: HK$120 million), HK$14 million (2021: HK$120 million) is expected to be recognised as revenue within one year. The following table shows unsatisfied performance obligations resulting from contracts with customers. 2022 2021 HK$M HK$M Aggregate amount of the transaction price allocated to revenue contracts that are partially or fully unsatisfied at the end of the year 90 992 Of the amount disclosed above at 31st December 2022, HK$90 million (2021: HK$992 million) is expected to be recognised as revenue within one year. 146