The American Club 2022/2023 Annual Report

PAGE 83

NOTES TO FINANCIAL STATEMENTS 30 JUNE 2023

14. CONTRACT LIABILITIES

This relates to consideration received to render services in future periods.

Prepayments are paid upfront as part of the initial sales transaction whereas revenue is recognised over time when services are provided to the customer. A contract liability is recognised for revenue relating to the Club at the time of the initial sales transaction and is released when services are rendered.

At the end of the reporting period, the Club has contract liabilities of $795,516 (2022 : $587,464).

2023

2022

$

$

Prepaid packages Deferred income

700,476 95,040 795,516

534,217 53,247 587,464

15. CLUB FUNDS

Operating Fund

Operating Fund comprises other income and expenses.

Capital Fund

Following Members’ approval on 3 June 2015 for the Club to undertake the Redevelopment Project, the instructions for the fund redemption of the GAP portfolio were issued on 10 June 2015 and placed as short-term deposits to protect the Club from market risk and volatility but with significantly reduced investment earnings. The Club liquidated its investment portfolio in August 2015 and recognised a net realised gain in investment securities and financial derivatives of $17.9 million in 2016. From June 2022, the Club placed $10.0 million as investment securities appropriately hedged with Bank of Singapore. The investment securities were increased to $15.0 million in February 2023, with the remaining funds placed as short-term deposit and for working capital. As a result of the redemption of majority of the investment portfolio in August 2015, the intention of the sub-funds is no longer aligned as there are insufficient investment returns from the remaining capital funds for the annual distribution to these sub-funds. The General Committee therefore has approved to present the sub-funds as a consolidated Capital Fund from 2019.

THE AMERICAN CLUB SINGAPORE ANNUAL REPORT 2022 / 2023