2.
BASIS OF PREPARATION
(continued)
(d) Use of estimates and judgements
The preparation of financial statements in conformity with RAP 7 requires the Manager to
make judgements, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses. The
estimates and associated assumptions are based on historical experience and various
other factors that are believed to be reasonable under the circumstances, the results of
which form the basis of making the judgements about carrying amounts of assets and
liabilities that are not readily apparent from other sources.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimates are revised and
any future periods affected.
Information about assumptions and estimation uncertainties that have a significant risk of
resulting in a material adjustment within the next financial year are included in the following
notes:
• Note 4 – Valuation of investment properties
• Note 27 – Valuation of financial instruments.
(e) Changes in accounting policies
(i) Subsidiaries
FRS 110 Consolidated Financial Statements introduces a new control model that
focuses on whether the Group has power over an investee, exposure or rights to
variable returns from its involvement with the investee and ability to use its power to
affect those returns.
In accordance with the transitional provisions of FRS 110, the Group reassessed its
involvement with investees under the new control model. The adoption of the new
standard did not result in a change in the control conclusion in respect of its
investment in its investees.
(ii) Disclosure of interests in other entities
From 1 January 2014, as a result of FRS 112 Disclosure of Interests in Other Entities,
the Group has expanded its disclosures about its interests in subsidiaries (see Note 6
and Note 14).
(iii) Offsetting of financial assets and financial liabilities
Under the Amendments to FRS 32 Financial Instruments: Presentation – Offsetting
Financial Assets and Financial Liabilities, to qualify for offsetting, the right to set off a
financial asset and a financial liability must not be contingent on a future event and
must be enforceable both in the normal course of business and in the event of default,
insolvency or bankruptcy of the entity and all counterparties. The adoption of
amendments to FRS 32 does not have any significant impact on the financial position
or performance of the Group and the Trust.
Notes to the Financial Statements
92 | CapitaRetail China Trust Annual Report 2014
