SDOT2 Product Disclosure Statement - Stockland

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Financial Performance over the period of the
borrowing using the effective interest rate
method.
(c) Borrowing costs
A-GAAP and A-IFRS: Borrowing costs include
interest, amortisation of discounts or premiums
relating to borrowings and amortisation of ancillary
costs incurred in connection with arrangement of
borrowings. Borrowing costs directly attributable
to Buildings under construction are capitalised as
part of the cost of these assets.
(d) Derivatives
The Trust has entered into a variety of derivative
financial instruments to manage its exposure to
changes in interest rates. Derivative financial
instruments are not held for speculative purposes.
A-GAAP: Derivative financial instruments which
are designated as effective hedges of underlying
exposures are accounted for on the same basis as
the underlying exposure. Interest payments and
receipts under interest rate swap contracts are
recognised in the Statement of Financial Position
on an accruals basis, as an adjustment to
borrowing costs. Other interest rate swaps not
meeting the accounting requirements for hedges
are valued at reporting date and any gains and
losses are brought to account in the Statement of
Financial Performance.
A-IFRS: Derivatives are initially measured at fair
value on the date a derivative contract is entered
into and subsequently remeasured to their fair
value at each reporting date. The resulting gain or
loss is recognised in the Statement of Financial
Performance immediately unless the derivative is
designated as and is effective as a hedging
instrument, in which event the timing of the
recognition in the Statement of Financial
Performance depends on the nature of the hedge
relationship.
The Trust designates certain derivatives as hedges
of highly probable forecast transactions (cash flow
hedges). The effective portion of changes in the
fair value of derivatives that are designated and
qualify as cash flow hedges are deferred in equity.
The gain or loss relating to the ineffective portion
is recognised immediately in the Statement of
Financial Performance. Amounts deferred in
equity are recycled to Statement of Financial
Performance in the periods when the hedged item
is recognised in the Statement of Financial
Performance.
Hedge accounting is discontinued when the
hedging instrument expires or is sold, terminated
or exercised or no longer qualifies for hedge
accounting. At that time, any cumulative gain or
loss deferred in equity remains in equity and is
recognised when the forecast transaction is
ultimately recognised in the Statement of
Financial Performance. When a forecast
transaction is no longer expected to occur, the
cumulative gain or loss that was deferred in equity
is recognised immediately in the Statement of
Financial Performance.
Certain derivative instruments do not qualify for
hedge accounting. Changes in the fair value of
any derivative instrument that do not qualify for
hedge accounting are recognised immediately in
the Statement of Financial Performance.
Derivatives embedded in other financial
instruments or other host contracts are treated as
separate derivatives when their risk and
characteristics are not closely related to those of
host contracts and the host contracts are not
measured at fair value with changes in fair value
recognised in the Statement of Financial
Performance.
(e) Financial instruments issued by the Trust
A-GAAP: Debt and equity instruments are
classified as either liabilities or as equity in
accordance with the substance of the contractual
arrangement. Transaction costs arising on the
issue of equity instruments are recognised directly
in equity as a reduction of the proceeds of the
equity instruments to which the costs relate.
Transaction costs are the costs that are incurred
directly in connection with the issue of those
equity instruments and which would not have
been incurred had those instruments not been
issued.
A-IFRS: Debt and equity instruments are classified
as either liabilities or as equity in accordance with
the substance of the contractual arrangement.
Issued Units in the Trust are classified as liabilities
in accordance with AASB 132 Financial
Instruments: Disclosure and Presentation.