Page 95 - ar2012

annual report 2012
93
Notes to the Financial Statements
3 Significant accounting policies (cont’d)
3.2 Foreign currencies (cont’d)
Hedge of net investment in foreign operation (cont’d)
Foreign currency differences arising on the retranslation of a fnancial liability designated as a
hedge of a net investment in a foreign operation are recognised directly in foreign currency
translation reserve in unitholders’ funds 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 relevant amount in the foreign currency translation
reserve is transferred to the statement of total return as part of the proft or loss on disposal.
3.3 Investment properties
Investment properties accounted for as non-current assets are stated at fair value. Valuation is
determined in accordance with the H-REIT Trust Deed, which requires the investment properties
to be valued by independent registered valuers in the following events:
• at least once a year in accordance with the Property Funds Appendix of CIS Code issued by the
MAS; and
• where the H-REIT Manager proposes to issue new units for subscription or to redeem existing
units unless the investment properties have been valued not more than 6 months ago.
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.
When an investment property is disposed of, the resulting gain or loss recognised in the
statement of total return is the difference between net disposal proceeds and the carrying
amount of the property.
Investment properties are not depreciated. The properties are subject to continued maintenance
and regularly revalued on the basis set out above. For taxation purposes, the H-REIT Group may
claim capital allowances on assets that qualify as plant and machinery under the income tax laws
of the countries in which the investment properties are located.
3.4 Financial instruments
Non-derivative fnancial assets
Loans and receivables and deposits are initially recognised on the date that they are originated.
All other fnancial assets are recognised initially on the trade date, which is the date that the H-REIT
Group or the Stapled Group becomes a party to the contractual provisions of the instrument.
The H-REIT Group and the Stapled Group derecognise a fnancial asset when the contractual
rights to the cash fows from the asset expire, or they transfer the rights to receive the contractual
cash fows on the fnancial asset in a transaction in which substantially all the risks and rewards of
ownership of the fnancial asset are transferred. Any interest in transferred fnancial assets that is
created or retained by the H-REIT Group or the Stapled Group is recognised as a separate asset
or liability.