3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.9 Expenses
(i) Property expenses
Property expenses consist of property management fee and lease management fee under the
Property Management Agreement, which are based on the applicable formula stipulated in Note 1.1,
reimbursable expenses payable to the Property Manager and other property expenses in relation to the
investment properties.
Property expenses are recognised as and when incurred and recorded on an accrual basis.
(ii) Manager’s fees
Manager’s fees are recognised as and when services are rendered and recorded on an accrual basis
using the applicable formula stipulated in Note 1.2.
(iii) Trustee’s fees
Trustee’s fees are recognised as and when services are rendered and recorded on an accrual basis
using the applicable formula stipulated in Note 1.3.
3.10 Finance income and finance costs
Finance income comprises mainly profit income. Profit income is recognised as it accrues in the
Statement of Total Return using the effective profit rate method.
Finance costs comprise profit expense on borrowings and profit rate swaps, amortisation of transaction
costs incurred on borrowings and brokerage and agent fees. All borrowing costs are recognised in the
Statement of Total Return using the effective profit rate method.
3.11 Tax
Tax expense comprises current and deferred tax. Current and deferred tax is recognised in the Statement
of Total Return except to the extent that it relates to a business combination, or items directly related to
Unitholders’ funds, in which case it is recognised in Unitholders’ funds.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using
tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in
respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax
is not recognised for:
• temporary differences on the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit; and
• temporary differences related to investments in subsidiaries to the extent that the Group is able
to control the timing of the reversal of the temporary difference and it is probable that they will not
reverse in the foreseeable future.
Year ended 31 December 2014
NOTES TO THE FINANCIAL STATEMENTS
SABANA REIT
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ANNUAL REPORT 2014
110
