- Significant accounting estimates and judgements
Assumptions concerning the future and judgements are made in the preparation of the financial statements. They
affect the application of the Trust’s accounting policies, reported amounts of assets, liabilities, incomes and
expenses and disclosures made. They are assessed on an on-going basis and are based on experience and
relevant factors, including expectations of future events that are believed to be reasonable under the
circumstances.
In the process of applying the Trust’s accounting policies, management has made the following judgement,
apart from those involving estimations, which has the most significant effect on the amounts recognised in the
financial statements:
Valuation of investment properties
Investment properties are stated at fair value based on valuations performed by independent professional valuers.
In determining the fair value, the valuers have used valuation methods which involve certain estimates. In relying
on the valuations reports, the Manager is satisfied that the valuation methods and estimates are reflective of the
current market conditions.
Income taxes
The Trust has not accounted for the deferred tax liability arising from the net appreciation on revaluation of
investment properties, as subject to meeting the terms and conditions of the Tax Ruling issued by the Inland
Revenue Authority of Singapore ("IRAS"), the Trust is not taxed on its distributable taxable income (refer to Note
2(s) Taxation). Where the terms or conditions are changed or have not been met, it will impact the deferred tax
provision in those periods.
- Functional and foreign currency
- Functional currency
The Manager has determined the currency of the primary economic environment in which the Trust
operates, i.e. functional currency, to be Singapore dollars.
- Foreign currency transactions
Transactions in foreign currencies are measured in the functional currency of the Trust and are recorded
on initial recognition at exchange rates approximating those ruling at the transaction dates. Monetary assets
and liabilities denominated in foreign currencies are translated at the closing rate of exchange ruling at the
balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency
are translated using the exchange rates as at the dates of the initial transactions.
Exchange differences arising on the settlement of monetary items or on translating monetary items at the
balance sheet date are recognised in the profit and loss account.
- Investment properties
Investment properties are initially recorded at cost. Subsequent to recognition, investment properties are
measured at fair value and gains or losses arising from changes in the fair value of investment properties are
included in the profit and loss account in the year in which they arise.
Investment properties are derecognised when either they have been disposed of or when the investment property
is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or
loss on the retirement or disposal of an investment property is recognised in the profit and loss account in the
year of retirement or disposal.
- Associated company
An associate is an entity in which the Trust has significant influence. The associate is equity accounted for from
the date the Trust obtains significant influence until the date the Trust ceases to have significant influence over the
associate.
The Trust’s investment in associate is accounted for using the equity method whereby the Trust’s share of profit
or loss of the associated company is included in the profit and loss account and the Trust’s share of net assets
of the associated company is included in the balance sheet. Goodwill relating to the associate is included in the
carrying amount of the investment.
When the Trust’s share of losses in an associate equals or exceeds its interest in the associate, the Trust does
not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.
The financial statements of the associate are prepared as of the same reporting date as the Trust. Where
necessary, adjustments are made to bring the accounting policies into line with those of the Trust.
- Intangible assets
Intangible assets acquired separately are measured initially at cost. Following initial recognition, intangible assets
are measured at cost less any accumulated amortisation and impairment losses.
Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation period and the
amortisation method are reviewed at least at each financial year-end.
Income support top-up payments
Income support top-up payments represent unamortised aggregate amount receivable in accordance with the
Deed of Income Support entered with Boulevard Development Pte Ltd ("Boulevard") for the acquisition of the
equity interest in the associated company, One Raffles Quay Pte Ltd. Income support top-up payments have a
finite useful life and are amortised over the period commencing from the date of completion up till 31 December
2011 based on the estimated amounts to be received by the Trust from Boulevard.
- Impairment of non-financial assets
The carrying amounts of the Trust’s assets are reviewed at each balance sheet date to determine whether there is
any indication that the assets have suffered an impairment loss.
If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of
the impairment loss. Whenever the recoverable amount of an asset is estimated to be less than its carrying
amount, the impairment loss is recognised in the profit and loss account.
Reversal of impairment loss recognised previously is recorded when there is an indication that the impairment
loss recognised for the asset no longer exists or has decreased. The reversal is recorded in the profit and loss
account. However, the increased carrying amount of an asset due to any reversal of impairment loss is
recognised to the extent that it does not exceed the cost, at the date of such reversal.
