129
Annual Report 2015
2 BASIS OF PREPARATION
2.1 Statement of compliance
The financial statements of HBT Group are prepared in accordance with Singapore Financial Reporting Standards ("
FRS
").
The financial statements of the H-REIT Group and the Stapled Group are prepared in accordance with the Statement
of Recommended Accounting Practice ("
RAP
") 7 "Reporting Framework for Unit Trusts" issued by the Institute of
Singapore Chartered Accountants, and the applicable requirements of the Code on Collective Investment Schemes
(the "
CIS Code
") issued by the Monetary Authority of Singapore ("
MAS
") and the provisions of the H-REIT Trust
Deed and the Stapling Deed. RAP 7 requires the accounting policies to generally comply with the recognition and
measurement principles of Singapore Financial Reporting Standards.
2.2 Basis of measurement
The financial statements have been prepared on the historical cost basis except as described below.
2.3 Functional and presentation currency
The financial statements are presented in Singapore dollars, which is the functional currency of HBT and H-REIT. All
financial information presented in Singapore dollars has been rounded to the nearest thousand, unless otherwise stated.
2.4 Use of estimates and judgements
The preparation of financial statements requires management to make judgements, 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.
Information about critical judgements in applying accounting policies and assumptions and estimation uncertainties
that have the most significant effect on the amounts recognised in the financial statements are described in the
following notes:
• Note 4 – Impairment of property, plant and equipment and prepaid land lease
• Note 5 – Valuation of investment properties
• Note 27 – Valuation of financial instruments
Measurement of fair values
A number of the Stapled Group’s accounting policies and disclosures require the measurement of fair values, for both
financial and non-financial assets and liabilities.
The H-REIT Manager and the HBT Trustee-Manager have an established control framework with respect to the
measurement of fair values. This includes a team that regularly reviews significant unobservable inputs and reports
directly to the Chief Financial Officer, who has overall responsibility for all significant fair value measurements.
The team regularly reviews significant unobservable inputs and valuation adjustments included in the fair value
measurements. If third party information, such as broker quotes or pricing services, is used to measure fair value,
then the H-REIT Manager and the HBT Trustee-Manager assess the documents that evidence obtained from the third
parties to support the conclusion that such valuations meet the requirements of FRS, including the level in the fair value
hierarchy the resulting fair value estimate should be classified.
NOTES TO THE FINANCIAL STATEMENTS
