CapitaLand Integrated Commercial Trust - Annual Report 2021

Notes to the Financial Statements YEAR ENDED 31 DECEMBER 2021 3 SIGNIFICANT ACCOUNTING POLICIES (continued) 3.9 Unitholders’ funds Unitholders’ funds represent the Unitholders’ residual interest in the Group’s net assets upon termination and is classified as equity. Incremental costs directly attributable to the issue of units are recognised as a deduction from Unitholders’ funds. 3.10 Revenue recognition Rental income Rental income from investment properties is recognised in the Statement of Total Return on a straight- line basis over the term of the lease, except where an alternative basis is more representative of the pattern of benefits to be derived from the leased assets. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease. Contingent rentals, which include gross turnover rental, are recognised as income in the accounting period on a receipt basis. No contingent rentals are recognised if there are uncertainties due to the possible return of amounts received. Car park income Car park income is recognised as it accrues on a time apportioned basis. 3.11 Expenses Property operating expenses Property operating expenses consist of property taxes, utilities, property management fees, property management reimbursements, marketing, maintenance and other property outgoings in relation to investment properties where such expenses are the responsibility of the Group. Property management fees are recognised on an accrual basis based on the applicable formula, stipulated in Note 1.1. Management fees Management fees are recognised on an accrual basis using the applicable formula, stipulated in Note 1.2. Trustee’s fees The Trustee’s fees are recognised on an accrual basis using the applicable formula, stipulated in Note 1.3. 3.12 Interest income, investment income and finance costs Interest income is recognised as it accrues, using the effective interest method. Investment income is recognised in the Statement of Total Return when the Group’s right to receive distribution income is established. Finance costs comprise interest expense on borrowings, interest expense from lease liabilities and amortisation of borrowings related transaction costs, and are recognised in the Statement of Total Return using the effective interest method over the period of borrowings. Annual Report 2021 247