Notes to the financial statements
Year ended 31 March 2016
3 Significant accounting policies (continued)
(k)
Issue expenses
Issue expenses represent expenses incurred in the issuance of additional units in the Trust. The expenses are
deducted directly against Unitholders’ funds, as stipulated in the Trust Deed.
(l)
Perpetual securities
The perpetual securities may be redeemed at the option of A-REIT. Distributions to the perpetual securities
holders will be payable semi-annually in arrears on a discretionary basis and will be non-cumulative. Accordingly,
the perpetual securities are classified as equity.
The expenses relating to the issue of the perpetual securities are deducted against the proceeds from the issue.
(m)
Revenue recognition
Rental income from operating leases
Rental income receivable under operating leases is recognised on a straight-line basis over the term of the lease,
except where an alternative basis is more representative of the pattern of benefits to be derived from the leased
assets. Lease incentives granted are recognised as an integral part of total rental income over the term of the
lease. Contingent rentals, which include gross turnover rental, are recognised as income in the accounting period
in which they are earned and the amount can be measured reliably.
Other income
Other income comprises interest income received from finance lease receivable, car park charges, utilities income
and sundry income. Interest income received from finance lease receivable is recognised on a basis that reflects
a constant periodic rate of return on the net investment in the finance lease receivable. Except for interest
income received from finance lease receivable, other income is recognised when the right to receive payment is
established, after services have been rendered.
(n)
Expenses
Property operating expenses
Property operating expenses are recognised on an accrual basis. Included in property operating expenses are
fees incurred under the Property Management Agreements and Lease Management Agreement which are based
on the applicable formula stipulated in Note 1(c) and Note 1(d) respectively.
Where the Group has the use of assets under operating leases, payments made under the leases are recognised
in the Statement of Total Return on a straight-line basis over the term of leases.
Management fees
Management fees are recognised on an accrual basis using the applicable formula stipulated in Note 1(b).
Trust expenses
Trust expenses are recognised on an accrual basis. Included in trust expenses is the Trustee fee which is based on
the applicable formula stipulated in Note 1(a).
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A-REIT ANNUAL REPORT
2015/2016
