NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2023 3 MATERIAL ACCOUNTING POLICIES (continued) 3.8 Leases (continued) As a lessor (continued) If an arrangement contains lease and non-lease components, then the Group applies the principles of FRS 115 to allocate the consideration in the contract. The Group recognises lease payments received from investment properties under operating leases as income on a straight-line basis over the lease term as part of ‘revenue’. 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 in which they are earned. No contingent rentals are recognised if there are uncertainties due to the possible return of amounts received. Car park income Car park income consists of season and hourly parking income. Car park income is recognised over time upon the utilisation of car parking facilities. 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 1.4. Trustee’s fees The Trustee’s fees are recognised on an accrual basis using the applicable formula, stipulated in Note 1.5. 204 CAPITALAND INTEGRATED COMMERCIAL TRUST
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