3.
SIGNIFICANT ACCOUNTING POLICIES
(continued)
(c) Financial instruments
(continued)
(iii) Derivative financial instruments, including hedge accounting
(continued)
Cash flow hedges
(continued)
If the hedging instrument no longer meets the criteria for hedge accounting, expires
or is sold, terminated or exercised, or the designation is revoked, then hedge
accounting is discontinued prospectively. The cumulative gain or loss previously
recognised and presented in the hedging reserve in Unitholders’ fund remains there
until the forecast transaction occurs. When the hedged item is a non-financial asset,
the amount recognised in the hedging reserve is transferred to the carrying amount of
the asset when it is recognised. If the forecast transaction is no longer expected to
occur, then the balance in the hedging reserve is recognised immediately in the
statement of total return. In other cases, the amount recognised in the hedging reserve
is transferred to the statement of total return in the same period that the hedged item
affects the statement of total return.
Hedge of net investment in foreign operation
Foreign currency differences arising on the retranslation of a financial liability
designated as a hedge of a net investment in a foreign operation are recognised in the
Trust’s statement of total return. On consolidation, such differences are recognised
directly, as part of foreign currency translation reserve, to the extent that the hedge is
effective. To the extent that the hedge is ineffective, such differences are recognised
in the statement of total return. When the hedged net investment is disposed of, the
cumulative amount in the foreign currency translation reserve attributable to that
investment is transferred to the statement of total return as an adjustment to the gain
or loss on disposal.
(d) Investment properties
Investment properties are properties held either to earn rental income or capital
appreciation or both. Investment properties are accounted for as non-current assets and
are stated at initial cost on acquisition and at fair value thereafter. The cost of a purchased
property comprises its purchase price and any directly attributable expenditure.
Transaction costs are included in the initial measurement. Fair value is determined in
accordance with the Trust Deed, which requires the investment properties to be valued by
independent registered valuers at least once a year in accordance with the CIS Code
issued by the MAS.
Any increase or decrease on revaluation is credited or charged to the statement of total
return as a net change in fair value of the investment properties.
Subsequent expenditure relating to investment properties that have already been
recognised is added to the carrying amount when it is probable that future economic
benefits, in excess of the originally assessed standard of performance of the existing asset
will flow to the Group.
All other subsequent expenditure is recognised as an expense in the period in which it is
incurred.
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