3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.6 Impairment (continued)
(ii) Non-financial assets
The carrying amounts of the Group’s non-financial assets, other than investment properties, are reviewed
at each reporting date to determine whether there is any indication of impairment. If any such indication
exists, then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying
amount of an asset or its related cash-generating unit (CGU) exceeds its estimated recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs
to sell. In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset or CGU. For the purpose of impairment testing, assets that cannot be tested
individually are grouped together into the smallest group of assets that generates cash inflows from
continuing use that are largely independent of the cash inflows of other assets or CGU.
Impairment losses are recognised in the Statement of Total Return. Impairment losses recognised in
respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU
(group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs)
on a
pro rata
basis.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that
the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change
in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
3.7 Issue expenses
Issue expenses relate to expenses incurred in connection with the issue of Units. Such expenses are
deducted directly against Unitholders’ funds.
3.8 Revenue recognition
Rental income from operating leases
Rental income receivable under operating leases from investment properties is recognised in the Statement
of Total Return on a straight-line basis over the term of the lease, except where an alternative basis is
more representative of the pattern of benefits to be derived from the leased assets. Lease incentives
granted are recognised as an integral part of total rental to be received. Contingent rentals are recognised
as income in the accounting period on a receipt basis. No contingent rentals are recognised if there are
uncertainties due to the possible return of amounts received.
Year ended 31 December 2014
NOTES TO THE FINANCIAL STATEMENTS
SABANA REIT
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ANNUAL REPORT 2014
109
