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notes tothe
financial statements
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STARHILL global reit ANNUAL REPORT FY 2016/17
3.4 Investment properties
Investment properties are properties held either to earn rental income or for capital appreciation or for both. Investment
properties are measured at cost on initial recognition, and subsequently at fair value with any changes therein recognised
in the statement of total return. Fair value is determined in accordance with the Trust Deed, which requires investment
properties to be valued by independent registered valuers in such manner and frequency required under Appendix 6 of
the CIS Code (“Property Fund Appendix”) issued by MAS.
Subsequent expenditure relating to investment properties that has already been recognised is added to the carrying
amount of the asset when it is probable that future economic benefits, in excess of originally assessed standard of
performance of the existing asset, will flow to the Group. All other subsequent expenditure is recognised as an expense in
the period in which it is incurred.
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.
3.5 Intangible asset
Goodwill
Goodwill and bargain purchase arise upon the acquisition of subsidiaries.
Goodwill represents the excess of the fair value of the consideration transferred over the Group’s interest in the net fair
value of the identifiable assets acquired and liabilities and contingent liabilities assumed. When the excess is negative, a
bargain purchase gain is recognised immediately in the statement of total return.
Goodwill arising on the acquisition of subsidiaries is presented in intangible asset. Goodwill is measured at cost less
accumulated impairment losses, and tested for impairment.
3.6 Financial instruments
(i)
Non-derivative financial assets
The Group initially recognises loans and receivables on the date that they are originated. All other financial assets
(including assets designated at fair value through the statement of total return) are recognised initially on the trade
date, which is the date that the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial assets
expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which
substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred
financial assets that is created or retained by the Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the balance sheet when, and only when,
the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset
and settle the liability simultaneously.
The Group classifies non-derivative financial assets into the following category: loans and receivables.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active
market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent
to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less
any impairment losses.
Loans and receivables comprise cash and cash equivalents, and trade and other receivables. Cash and cash
equivalents comprise cash at bank and fixed deposits.