Annual report 2008 - Altarea Cogedim

• Lessee termination fees
Termination fees are charged to tenants when they terminate
the lease before the end of the contract term.
These fees are accounted for as part of the lease agreement
that was terminated and are taken to income in the year
they are recognised.
• Early termination fees
When the lessor terminates a lease before its term, the
lessor pays a termination fee to the tenant in place.
a) Replacement of a tenant
If payment of an early termination fee enables performance
of the asset to be enhanced (as by increasing the rent
and thereby the value of the asset), this expenditure may
be capitalised. If not, this expenditure is expensed as
incurred.
b) Renovation of a building requiring removal of the tenants
in place
If an early termination fee is paid as part of major renovation
or reconstruction work on a building that requires tenants
to leave, this expenditure is capitalised and included in the
cost of the asset under development.
n Leases in the financial statements with the Group as lessee
Leases of land or buildings and construction leases are
classified either as finance leases or as operating leases on
the same basis as leases of other assets. If the lease does
not provide for transfer of ownership to the lessee at the end
of the lease term, it is presumed to be an operating lease.
An upfront payment on such a lease represents prepaid rent
that is recognised in prepaid expenses and then spread
over the term of the lease. Each lease agreement requires a
specific analysis of its terms.
In 2007, the Group acquired some commercial properties
under finance leases.
7.26. Gain or loss on the disposal of
investment assets
The gain or loss on disposal of investment properties is the
difference between the selling price received net of related
costs and the fair value of the property on the closing
balance sheet for the previous period.
7.27. Change in the fair value of investment
properties
The change in fair value of each property is reflected in
the income statement of the period and is determined as
follows:
Market value at the end of the period (taking into account
the impact of stepped rents and rent holidays as measured
by the property appraiser) minus [Market value at the end
of the previous period + amount of construction work and
expenses eligible for capitalisation during the year]
7.28. Borrowing costs or costs of interestbearing
liabilities
In accordance with the revised IAS 23, borrowing costs
directly attributable to the construction of qualifying assets
are included in the cost of these assets.
Finance costs attributable to programmes are capitalised as
part of the cost of inventories or assets under development
during the construction phase, except in certain cases.
The net cost of debt includes interest incurred on
borrowings and other financial liabilities, income from loans
and advances to participating interests, gains on sale of
marketable securities and the impact of interest-rate swaps
used as interest-rate hedges.
Where there is a significant delay in the construction project,
management may decide if the delay is unusually long not
to capitalise finance costs attributable to the programme
any longer. Management estimates the date at which the
capitalisation of finance costs may resume.
7.29. Discounting of payables and
receivables
This line item shows the combined effect of discounting
payables and receivables due in more than one year to present
value. This effect is recognised under the “Discounting of
payables and receivables” line item.
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