Annual Report 2011 - Dundee International REIT

DUNDEE INTERNATIONAL 2011 Annual Report
Unit-based compensation plan
The Trust has a Deferred Unit Incentive Plan (“DUIP”), as described in Note 16, that provides for the grant of
deferred trust units and income deferred trust units to trustees, officers, employees, affiliates and their service
providers (including the asset manager). Unvested deferred trust units are recorded as a liability and
compensation expense and, where applicable, asset management expense. Grants to trustees, officers and
employees are recognized as compensation expense and included in general and administrative expenses.
They are recognized over the vesting period at the amortized cost based on the fair value of the units. Once
vested, the liability is remeasured at each reporting date at amortized cost based on the fair value of the
corresponding Units, with changes in fair value being recognized in comprehensive income, as a fair value
adjustment to financial instruments. Deferred units granted to DRC for payment of asset management fees
are included in general and administrative expenses during the period for accounting purposes as they relate
to services provided during the period and the units and fees are initially measured by applying a discount to
the fair value of the corresponding Units. The discount is estimated by applying the Black-Scholes model,
taking into consideration the volatility of the Canadian REIT equity market and the German real estate industry.
Once recognized, the liability is remeasured at each reporting date at a discount to the fair values of the
corresponding Units, with the change in value being recognized in comprehensive income as fair value
adjustment to financial instruments.
Cash and cash equivalents
Cash and cash equivalents include all short-term investments with an original maturity of three months or less,
and exclude cash subject to restrictions that prevent its use for current purposes. Excluded from cash and
cash equivalents are amounts held for repayment of tenant security deposits as required by various lending
agreements. Deposits are included in other non-current assets.
Financial instruments
Designation of financial instruments
The following summarizes the Trust’s classification and measurement of financial assets, liabilities and financial
derivatives:
Classification Measurement
Financial assets
Amounts receivable Loans and receivables Amortized cost
Cash and cash equivalents Loans and receivables Amortized cost
Financial liabilities
Term loan credit facility Other liabilities Amortized cost
Convertible debentures – host instrument Other liabilities Amortized cost
Exchangeable Notes Fair value through profit and loss Fair value
Deposits Other liabilities Amortized cost
Deferred Unit Incentive Plan Other liabilities Amortized cost
Amounts payable and accrued liabilities Other liabilities Amortized cost
Distributions payable Other liabilities Amortized cost
Financial derivatives
Derivative assets Fair value through profit and loss Fair value
Derivative liabilities Fair value through profit and loss Fair value
Convertible debentures — conversion feature Fair value through profit and loss Fair value
Financial assets
The Trust classifies its financial assets upon initial recognition as loans and receivables. All financial assets are
initially measured at fair value, less any related transaction costs. Subsequently, loans and receivables are
measured at amortized cost.
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