Abacus Property Group – Annual Financial Report 2018

NOTES TO THE FINANCIAL STATEMENTS – About this Report
30 JUNE 2018
ABACUS PROPERTY GROUP
Abacus Property Group (“APG” or the “Group”) is comprised of Abacus Group Holdings Limited (“AGHL”) (the
nominated parent entity), Abacus Trust (“AT”), Abacus Group Projects Limited (“AGPL”), Abacus Income Trust
(“AIT”), Abacus Storage Property Trust (“ASPT”) and Abacus Storage Operations Limited (“ASOL”). Shares in
AGHL, AGPL and ASOL and units in AT, AIT and ASPT have been stapled together so that neither can be dealt
with without the other. The securities trade as one security on the Australian Securities Exchange (the “ASX”)
under the code ABP.
The financial report of the Group for the year ended 30 June 2018 was authorised for issue in accordance with a
resolution of the directors on 17 August 2018.
The nature of the operations and principal activities of the Group are described in the Directors’ Report.
SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS
In applying the Group’s accounting policies management continually evaluates judgements, estimates and
assumptions based on experience and other factors, including expectations of future events that may have an
impact on the Group. All judgements, estimates and assumptions made are believed to be reasonable, based on
the most current set of circumstances available to management. Actual results may differ from these judgements,
estimates and assumptions. Significant judgements, estimates and assumptions made by management in the
preparation of these financial statements are outlined below:
(a) Significant accounting judgements
Accounting policy – financial assets and liabilities at fair value through profit and loss
A financial asset or financial liability is designated by the entity as being at fair value through profit or loss upon
initial recognition. The Group uses this designation where doing so results in more relevant information, because
it is a group of financial assets and liabilities which is managed and its performance is evaluated on a fair value
basis, in accordance with the Group’s documented risk management and investment strategy, and information
about the instruments is provided internally on that basis to the entity’s key management personnel and the
Board.
Control and significant influence
In determining whether the Group has control over an entity, the Group assesses its exposure or rights to variable
returns from its involvement with the entity and whether it has the ability to affect those returns through its power
over the investee. The Group may have significant influence over an entity when it has the power to participate in
the financial and operating policy decisions of the entity but is not in control or joint control of those policies.
(b) Significant accounting estimates and assumptions
Valuation of investment properties and property, plant and equipment held at fair value
The Group makes judgements in respect of the fair value of investment properties and property, plant and
equipment (Note 22(n)). The fair value of these properties are reviewed regularly by management with reference
to external independent property valuations and market conditions existing at reporting date, using generally
accepted market practices. The assumptions underlying estimated fair values are those relating to the receipt of
contractual rents, expected future market rentals, maintenance requirements, capitalisation rates and discount
rates that reflect current market conditions and current or recent property investment prices. If there is any
material change in these assumptions or regional, national or international economic conditions, the fair value of
investment properties and property, plant and equipment may differ and may need to be re-estimated.
Impairment of property loans and financial assets
In considering the impairment of property loans and financial assets, the Group undertakes a market analysis of
the secured property development and other securities being utilised to support the underlying loan and financial
assets and identifies if a deficiency of security exists and the extent of that deficiency, if any. If there is an
indicator of impairment, fair value calculations of expected future cashflows are determined and if there are any
differences to the carrying value of the loan, an impairment is recognised.
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