124 CapitaLand Integrated Commercial Trust Notes to the financial statements Year ended 31 December 2024 3 MATERIAL ACCOUNTING POLICIES (continued) 3.2 Plant and equipment (continued) Depreciation (continued) The estimated useful lives for the current and comparative years are as follows: Furniture, fittings and equipment – 2 to 5 years Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate. 3.3 Investment properties Investment properties are properties held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment properties are measured at cost on initial recognition and subsequently at fair value with any change therein recognised in the Statement of Total Return. Fair value is determined in accordance with the Trust Deed, which requires the investment properties to be valued by independent registered valuers in the following events: • in such manner and frequency required under the CIS Code issued by MAS; and • at least once in each period of 12 months following the acquisition of each parcel of real estate property. Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in the Statement of Total Return. Any increase or decrease on revaluation is credited or charged to the Statement of Total Return as a net change in fair value of the investment properties. Investment properties are not depreciated. The properties are subject to continued maintenance and regularly revalued on the basis set out above. For income tax purposes, the Group and the Trust may claim capital allowances on assets that qualify as plant and machinery under the Income Tax Act 1947. 3.4 Foreign currency Foreign currency transactions Items included in the financial statements of each entity in the Group are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity (the functional currency). Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction. Foreign currency differences arising on translation are generally recognised in Statement of Total Return. However, foreign currency differences arising from the translation of the following items are recognised in the Statement of Movements in Unitholders’ Funds: • an equity investment designated as at fair value through other comprehensive income (“FVOCI”); • a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; and • qualifying cash flow hedges to the extent the hedge is effective.
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