CG malls europe - Commerz Real

Commerz Real Estate Master FCP – SIF
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2009
2.11. Borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated
at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized
as finance cost in the statement of comprehensive income over the period of the borrowings using the effective
interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs.
To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised
as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the date of the statement of financial position.
2.12. Current and deferred income tax
Financial Statements
Tax expense comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it
relates to items recognised directly in equity, in which case the tax is also recognised in equity.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the date of
the statement of financial position in the countries where the Group operates. Management periodically evaluates positions
taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation, and
establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred
income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than
a business combination that at the time of the transaction affects neither accounting or taxable profit or loss. Deferred
income tax is determined using rates (and laws) which have been enacted or substantially enacted by the balance sheet
date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability
is settled. Deferred income tax assets are recognised to the extent that it is probably that future taxable profit will be
available against which the temporary differences can be utilised.
The carrying value of the Group’s investment property will generally be realised by a combination of income (rental
stream during the period of use) and capital (the consideration on the sale at the end of use). In jurisdictions where different
tax rates exist for income and capital gains, the Group considers the planned recovery of the asset and how that
affects the tax rate used in the calculation of the deferred tax. The length of the period for which a property will be held
prior to disposal is based on the Group’s current plans and recent experience with similar properties. The capital gains
tax rate applied is that which would apply on a direct sale of the property recorded in the statement of financial position,
regardless of whether the Group would structure the sale via the disposal of the subsidiary holding the asset, to which a
different tax rate may apply.
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