SWIRE PROPERTIES ANNUAL REPORT 2023 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. 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 which comprises: 2023 2022 HK$M HK$M Gross rental income from investment properties 13,408 12,226 Property trading 166 921 Hotels 979 565 Rendering of other services 117 114 14,670 13,826 2023 2022 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 14 120 Of the contract liabilities of HK$5 million outstanding at 31st December 2023 (2022: HK$14 million), HK$5 million (2022: HK$14 million) is expected to be recognised as revenue within one year. The following table shows unsatisfied performance obligations resulting from contracts with customers. 2023 2022 HK$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 46 90 Of the amount disclosed above at 31st December 2023, HK$46 million (2022: HK$90 million) is expected to be recognised as revenue within one year. 153