NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2025 2. SUMMARY OF ACCOUNTING POLICIES (CONT’D) 2.4 Significant accounting judgments and estimates The preparation of the Group’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of each reporting period. Uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future periods. (a) Judgments made in applying accounting policies Except as those disclosed in this report, management is of the opinion that there is no other significant judgment made in applying accounting policies that have a significant effect on the amounts recognised in the consolidated financial statements within the next financial period. Project revenue For the financial year ended 31 December 2025, the Group recognised project revenue of $567,945,000 (2024: $432,520,000) and the carrying amounts of contract assets and contract liabilities arising from these projects as at 31 December 2025 amounted to $188,792,000 and $31,652,000 (2024: $121,160,000 and $85,686,000) respectively. The Group recognised revenue from project contracts using the input method that reflect the overtime transfer of control to its customers, which is measured by reference to the Group’s progress towards completing the performance obligation on the contract. The measure of progress is determined by reference to the contract costs incurred to date as a percentage of the total estimated costs for each contract. The carrying amounts of assets and liabilities arising from construction contracts at the end of each reporting period are disclosed in Note 9 to the consolidated financial statements. (b) Key sources of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the end of each reporting period are discussed below. The Group based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur. Impairment assessment of trade receivables and contract assets The Group uses a provision matrix to calculate expected credit losses (“ECLs”) for trade receivables and contract assets. The provision matrix is based on historical observed default rates, existing market conditions, adjusted for forward looking information at each reporting period. The determination of ECL require the use of management judgment and estimates and are sensitive to changes in circumstances and economic conditions. This information about the ECLs on the Group’s trade and other receivables and contract assets is disclosed in Note 11 and Note 9 respectively. The carrying amount of trade receivables and contract assets as at 31 December 2025 are $126,004,000 and $188,792,000 (2024: $117,242,000 and $121,160,000) respectively. 124 CSE GLOBAL LIMITED
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