3 SIGNIFICANT ACCOUNTING POLICIES
(continued)
3.2 Plant and equipment
(continued)
Depreciation methods, useful lives and residual values are reviewed, and adjusted as
appropriate, at each reporting date.
3.3 Investment properties
Investment properties are properties held either to earn rental income or for capital
appreciation or both. Investment properties are accounted for as non-current assets and
are stated at initial cost on acquisition and at fair value thereafter. The cost of a purchased
property comprises its purchase price and any directly attributable expenditure including
capitalised borrowing costs. Transaction costs shall be included in the initial
measurement. 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 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.
When an investment property is disposed of, the resulting gain or loss recognised in the
Statement of Total Return is the difference between net disposal proceeds and the
carrying amount of the property.
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.
3.4 Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of
the Group at the exchange rate at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies at the end of the reporting date are
retranslated 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
retranslated to the functional currency at the exchange rate at the date on which the fair
value was determined.
Foreign currency differences arising on retranslation are recognised in Statement of Total
Return, except for the following differences which are recognised in Unitholders’ funds,
arising on the retranslation of:
• available-for-sale equity instruments (except on impairment in which case foreign
currency differences that have been recognised in Unitholders’ funds are reclassified
to Statement of Total Return);
Notes to the Financial Statements
Year ended 31 December 2014
158 | CapitaMall Trust Annual Report 2014
