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Independent valuations of shopping centres are prepared annually

with the exception of when the shopping centre is under development.

The Directors’ assessment of fair value takes into account annual

independent valuations, that were prepared which take into account

any changes in estimated yield, underlying income and valuations of

comparable centres. In determining the fair value, the capitalisation

of net income method and the discounting of future cash flows to their

present value have been used which are based upon assumptions and

judgement in relation to future rental income, property capitalisation

rate or estimated yield and make reference to market evidence of

transaction prices for similar properties.

Where the centre is undergoing a major redevelopment, the fair value

of the centre is assessed by the Directors at each reporting date and

any increment and decrement recognised. An independent valuation is

obtained on completion of the major redevelopment.

ii) Major redevelopment

The Trust’s development projects include costs incurred for the

current and future redevelopment and expansion of its shopping centre

investment. Development projects include capitalised construction and

development costs and where applicable borrowing costs on qualifying


Development projects are carried at fair value based on Directors’

assessment of fair value at each reporting date taking into account

the expected costs to complete, the stage of completion, expected

underlying income and yield of the development. Any increment or

decrement in the fair value of development projects resulting from

Directors’ assessment of fair value is included in the statement of

comprehensive income in the year in which it arises. On completion,

development projects are reclassified to shopping centre investment

and an independent valuation is obtained.

The assessment of fair value and possible impairment in the fair value

of shopping centre investment and development projects are significant

estimates that can change based on the Trust’s continuous process of

assessing the factors affecting its property.

(b) Revenue recognition

Revenue is recognised to the extent that it is probable that the

economic benefits will flow to the Trust and can be reliably measured.

Rental income from investment properties is accounted for on a

straight line basis over the lease term. Contingent rental income is

recognised as income in the period in which it is earned. If not received

at balance date, revenue is reflected in the balance sheet as receivables

and carried at fair value. Recoveries from tenants are recognised as

income in the year the applicable costs are accrued.

Certain tenant allowances that are classified as lease incentives are

recorded as part of investment properties and amortised over the term

of the lease. The amortisation is recorded against property income.

All other revenues are recognised on an accruals basis.

(c) Expenses

Expenses are brought to account on an accruals basis.

(d) Taxation

Under current Australian income tax legislation, the Trust is not

liable for Australian income tax, including capital gains tax, provided

that members are presently entitled to the income of the Trust as

determined in accordance with the Trust’s constitution.

(e) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of

GST except where the GST incurred on purchase of goods and services

is not recoverable from the tax authority, in which case the GST is

recognised as part of the cost of acquisition of the asset or as part of

the expense item as applicable. Receivables and payables are stated

with the amounts of GST included.

The net amount of GST payable or receivable to government authorities

is included as part of receivables or payables in the balance sheet.

Cash flows are included in the cash flow statement on a gross basis and

the GST component of cash flows arising from investing and financing

activities, which is recoverable from, or payable to, the taxation

authority are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of

GST recoverable from, or payable to, the taxation authority.

(f) Financing costs

Financing costs include interest, amortisation of discounts or premiums

relating to borrowings and other costs incurred in connection with

the arrangement of borrowings. Financing costs are expensed as

incurred unless they relate to a qualifying asset. A qualifying asset is

an asset which generally takes more than 12 months to be readied for

its intended use or sale. In these circumstances, the financing costs

are capitalised to the cost of the asset. Where funds are borrowed by

the Trust for the acquisition or construction of a qualifying asset, the

associated financing costs are capitalised.

(g) Contributed equity

Issued and paid up capital is recognised at the fair value of the

consideration received by the Trust. Any transaction costs arising

on the issue of ordinary units are recognised directly in equity as a

reduction of the proceeds received.

(h) Derivative and other financial assets and liabilities

The Responsible Entity utilises interest rate swaps to manage the risks

associated with interest rate fluctuations. Such derivative financial

instruments are recognised at fair value.

The Responsible Entity has set defined policies and implemented

a comprehensive hedging program to manage interest rate risks.

Derivative instruments are transacted to achieve the economic

outcomes in line with the Trust’s treasury policy and hedging program

and are not transacted for speculative purposes. Accounting standards

however require compliance with documentation, designation and

effectiveness parameters before a derivative instrument is deemed

to qualify for hedge accounting treatment. These documentation,

designation, and effectiveness requirements cannot be met in all

circumstances. As a result, derivative instruments are deemed not to

qualify for hedge accounting and are recorded at fair value. Gains or

losses arising from the movement in fair values are recorded in the

statement of comprehensive income.

The fair value of derivatives have been determined with reference to

market observable inputs for contracts with similar maturity profiles.

The valuation is a present value calculation which incorporates interest

rate curves and the credit quality of all counterparties.

The accounting policies adopted in relation to other material financial

assets and liabilities are detailed as follows: