CapitaLand Integrated Commercial Trust - Annual Report 2021

Notes to the Financial Statements YEAR ENDED 31 DECEMBER 2021 2 BASIS OF PREPARATION (continued) 2.5 Changes in accounting policies (continued) COVID-19 Related Rent Concessions beyond 30 June 2021 The amendment allows the Group as lessee not to account for rent concessions as lease modifications if they are a direct consequence of COVID-19 and if all the criteria are met: • the revised consideration is substantially the same or less than the original consideration; • the reduction in lease payments relates to payments due on or before 30 June 2022; and • no other substantive changes have been made to the terms of the lease. 3 SIGNIFICANT ACCOUNTING POLICIES The accounting policies set out below have been applied consistently to all periods presented in these financial statements, and have been applied consistently by the Group, except as explained in Note 2.5, which addresses changes in accounting policies. 3.1 Basis of consolidation Business combinations The Group accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs. The Group has an option to apply a ‘concentration test’ that permits a simplified assessment of whether an acquired set of activities and assets is not a business. The optional concentration test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. The Group measures goodwill at the date of acquisition as: • the fair value of the consideration transferred; plus • the recognised amount of any NCI in the acquiree; plus • if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree, over the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. Any goodwill that arises is tested annually for impairment. CapitaLand Integrated Commercial Trust 232