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Notes to the financial statements
Depreciation is provided on the straight-line basis over the estimated useful lives of each component of
an item of plant and equipment as follows:
Furniture and fixtures
Equipment
7 years
8 to 10 years
Gains or losses arising from the retirement or disposal of plant and equipment are determined as the
difference between the estimated net disposal proceeds and the carrying amount of the asset, and are
recognised in the Statement of Total Return on the date of retirement or disposal.
Depreciation methods, useful lives and residual values are reviewed and adjusted as appropriate at each
balance sheet date.
(d)
Financial instruments
Recognition and derecognition
A financial instrument is recognised if A-REIT becomes a party to the contractual provisions of the
instruments. Financial assets are derecognised if A-REIT’s contractual rights to the cash flows from the
financial assets expire or if A-REIT 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 assets
are transferred. Regular way purchases and sales of financial assets are accounted for at trade date, i.e.,
the date that A-REIT commits itself to purchase or sell the asset. Financial liabilities are derecognised if
A-REIT’s obligations specified in the contract expire or are discharged or cancelled.
Offsetting financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount reported in the balance sheet when, and
only when A-REIT has a legal right to offset the amounts and intends either to settle on a net basis, or
realise the asset and settle the liability simultaneously.
Non-derivative financial instruments
Non-derivative financial assets (comprising trade and other receivables, cash and cash equivalents) are
categorised as “Loans and receivables”.
Non-derivative financial liabilities comprise trade and other payables, security deposits, deferred
payments, term loans, medium term notes and short term borrowings.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not
measured at fair value through profit or loss, any directly attributable transaction costs. Subsequent
to initial recognition, non-derivative financial instruments are measured at amortised cost using the
effective interest method, less any impairment losses.
The amortised cost of a financial asset or liability is the amount at which the financial asset or liability is
measured at initial recognition, minus principal repayments, plus or minus the cumulative amortisation
using the effective interest method of any difference between the initial amount recognised and the
maturity amount, minus any reduction for impairment.
126 Ascendas real estate investment trust