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notes tothe
financial statements
136
STARHILL global reit ANNUAL REPORT FY 2016/17
29.
Financial ratios
Group
2017
%
2016
%
Ratio of expenses to weighted average net assets
(1)
0.98
0.98
Portfolio turnover rate
(2)
0.25
1.52
(1)
The ratios are computed in accordance with guidelines of the Investment Management Association of Singapore. The expenses used in the computation relate to
expenses of the Group and exclude property related expenses, finance expenses and the performance component of the Manager’s fees.
(2)
The ratio is computed based on the lesser of purchases or sales of underlying investment properties of the Group expressed as a percentage of weighted average net
asset value.
30. New accounting standards, interpretations and amendments not yet adopted
A number of new standards, amendments to standards and interpretations that have been issued as of the balance
sheet date but are not yet effective for the year ended 30 June 2017 have not been applied in preparing these financial
statements.
These new standards include, among others, FRS 115
Revenue from Contracts with Customers
, FRS 109
Financial
Instruments
and FRS 116
Leases.
FRS 115 and FRS 109 are mandatory for adoption by the Group on 1 July 2018, and
FRS 116 on 1 July 2019.
Applicable to 2019 financial statements
FRS 115
Revenue from Contracts with Customers
FRS 115 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It
also introduces new cost guidance which requires certain costs of obtaining and fulfilling contracts to be recognised as
separate assets when specified criteria are met. When effective, FRS 115 replaces existing revenue recognition guidance,
including FRS 18
Revenue
, FRS 11
Construction Contracts
and related interpretations.
The Group plans to adopt the standard for the year ending 30 June 2019, and does not expect the impact on the financial
statements from the adoption of this standard to be significant.
FRS 109
Financial Instruments
FRS 109 replaces most of the existing guidance in FRS 39
Financial Instruments: Recognition and Measurement
. It includes
revised guidance on the classification and measurement of financial instruments, a new expected credit loss model for
calculating impairment on financial assets, and new general hedge accounting requirements.
The Group is currently assessing the potential impact of adopting this standard and plans to adopt this for the year
ending 30 June 2019. The Group does not expect the impact on the financial statements to be significant.
Applicable to 2020 financial statements
FRS 116
Leases
FRS 116 eliminates the lessee’s classification of leases as either operating leases or finance leases and introduces a single
lessee accounting model. Applying the new model, a lessee is required to recognise right-of-use assets and lease liabilities
for all leases with a term of more than 12 months, unless the underlying asset is of low value.
FRS 116 substantially carries forward the lessor accounting requirements in FRS 17
Leases
. Accordingly, a lessor continues
to classify its leases as operating leases or finance leases, and to account for these two types of leases using the FRS 17
operating lease and finance lease accounting models respectively. However, FRS 116 requires more extensive disclosures
to be provided by a lessor. When effective, FRS 116 replaces existing lease accounting guidance, including FRS 17 and
related interpretations.
The Group is currently assessing the potential impact of adopting this standard and plans to adopt this for the year
ending 30 June 2020.