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Notes to the financial statements
(ii)
Management fees
Management fees are recognised on an accrual basis using the applicable formula stipulated
in note 1(b).
(iii)
Trust expenses
trust expenses are recognised on an accrual basis. Included in trust expenses is the trustee’s fees
which are based on the applicable formula stipulated in note 1(a).
(k)
Finance income and finance costs
Finance income comprises interest income, any net gain arising from the extinguishment of interestbearing
borrowings and changes in fair value of financial liabilities measured at fair value through profit
or loss. Interest income is recognised as it accrues in the Statement of Total Return, using the effective
interest method.
Finance costs comprise interest expense on borrowings, transaction costs directly attributable to financial
liabilities measured at fair value through profit or loss, changes in fair value of financial liabilities measured
at fair value through profit or loss, and accretion adjustments on borrowings related transaction costs,
security deposits and deferred payments.
Interest expense on borrowings, accretion adjustments on borrowings related transaction costs, security
deposits and deferred payments are recognised in the Statement of Total Return using the effective
interest method over the period of borrowings, except to the extent that they are capitalised as being
directly attributable to the acquisition, construction or production of an asset which necessarily takes a
substantial period of time to be prepared for its intended use or sale.
(l)
Operating segments
An operating segment is a component of A-REIT that engages in business activities from which it may
earn revenues and incur expenses. All operating segments’ operating results are reviewed regularly
by A-REIT’s CODM to make decisions about resources to be allocated to the segment and assess its
performance, and for which discrete financial information is available.
8th Annual Report FY09/10
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