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annual report 2012
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Notes to the Financial Statements
2 Basis of preparation (CONt’D)
2.4 Use of estimates and judgments
The preparation of fnancial statements requires management to make judgments, estimates and
assumptions that affect the application of accounting policies and reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
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 in any future
periods effected.
In particular, information about critical judgments in applying accounting policies and assumptions
and estimation uncertainties that have the most signifcant effect on the amounts recognised in the
fnancial statements are described in the following notes:
• Note 4 – Valuation of investment properties
3 Significant accounting policies
The accounting policies set out below have been applied by HBT, the H-REIT Group and the Stapled
Group consistently to all periods presented in these fnancial statements.
3.1 Consolidation
Stapling
Where entities enter into a stapling arrangement, the stapling arrangement is accounted for as a
business combination under the purchase method.
Subsidiaries
Subsidiaries are entities controlled by the H-REIT Group. The fnancial statements of subsidiaries
are included in the consolidated fnancial statements from the date that control commences until
the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them with the
policies of the Group.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income or expenses arising from intra-
group transactions, are eliminated in preparing the consolidated fnancial statements of the H-REIT
Group and the Stapled Group.