Company: MAGH
Filing Date: 2025-09-15
Form Type: 20-F
Source: 0001493152-25-013424
Chunk: 136

Company: Magnitude International Ltd
Filing Date: 2025-09-15
Form: 20-F
Item: Item 19
Chunk 136
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 money if the contract includes a significant
financing component. Consideration payable to a customer is deducted from the transaction price if the Group does not receive a separate
identifiable benefit from the customer. When consideration is variable, if applicable, the estimated amount is included in the transaction
price to the extent that it is highly probable that a significant reversal of the cumulative revenue will not occur when the uncertainty
associated with the variable consideration is resolved.

Specifically,
the Group uses a five-step approach to recognize revenue:

  Step                                                                              
  Step                                                                              
  Step                                                                              
  Step                                                                              
  Step                                                                              

A
performance obligation may be satisfied at a point in time or over time.

Revenue
from provision of electrical works and installation services

The
Group generally acts as the main electrical contractor in providing a range of greenfield and brownfield electrical works and installation
services through fixed price contracts in private and public housing sectors including condominium, residual flats and bungalows, commercial
and mixed development typed properties. The asset is created over time during the contract period, and it is accounted for as a single
performance obligation that is satisfied over time. This is because the performance creates or enhances an asset that the customer controls
as the asset is created or enhanced, and the performance does not create an asset with an alternative use to the Group and the Group
has an enforceable right to payment for performance completed to date.

Revenue
is recognized over time using input method by reference to the Group’s progress towards completing the electrical works and installation
services. The measure of progress is determined based on the proportion of contract costs incurred to date to the estimated total contract
costs. Costs incurred that are not related to the contract or that do not contribute towards satisfying a performance obligation are
excluded from the measure of progress and instead are expensed as incurred.

The
period between the transfer of the promised services and customer payment may exceed one year. For such contracts, there is no significant
financing component present as the payment terms is an industry practice to protect the customer from the performing entity’s failure
to adequately complete some or all of its obligations under the contract. As a consequence, the Group does not adjust any of the transaction
prices for the time value of money.

Revenue
from construction contracts are also adjusted with variations to the contracts claimable from customers, as well as liquidated damages
due to delays or other causes, payable to customers.

Estimates
of revenues, costs or extent of progress toward completion are revised if circumstances