144 CapitaLand Ascendas REIT Notes to the Financial Statements 31 December 2025 3. Material Accounting Policy Information (continued) 3.2 Foreign currency (continued) Foreign operations The assets and liabilities of foreign operations, including fair value adjustments arising on acquisition, are translated to Singapore dollars at exchange rates prevailing at the reporting date. The income and expenses of foreign operations are translated to Singapore dollars at exchange rates at the dates of the transactions. Fair value adjustments arising from the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate. Foreign currency differences are recognised in the translation reserve in the Statements of Movements in Unitholders’ Funds. However, if the foreign operation is not a wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is transferred to the Consolidated Statement of Total Return as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation. These are recognised in the translation reserve in the Statements of Movements in Unitholders’ Funds. 3.3 Investment properties and investment properties under development Investment properties are properties held either to earn rental income or for capital appreciation, or for both, but not for sale in the ordinary course of business. Investment properties under development include properties that are being constructed or developed for future use as investment properties. Investment properties and investment properties under development are initially stated at cost, including transaction costs, and are measured at fair value thereafter, with any change therein recognised in the Consolidated Statement of Total Return. Fair values are determined in accordance with the Trust Deed, which requires the investment properties to be valued by independent registered valuers in the following events: (i) in such manner and frequency required under the CIS Code issued by MAS; and (ii) at least once in a financial year following the acquisition of the investment properties. When an investment property is disposed of, the resulting gain or loss recognised in the Consolidated Statement of Total Return is the difference between net disposal proceeds and the carrying amount of the property. 3.4 Plant and equipment Plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the plant and equipment. Subsequent expenditure relating to plant and equipment is added to the carrying amount of the asset when it is probable that future economic benefit in excess of the originally assessed standard of performance of the existing asset will flow to the Group. All other subsequent expenditure is recognised as an expense in the period in which it is incurred. Depreciation is provided on the straight-line basis over the estimated useful lives of each component of an item of plant and equipment. Gains or losses arising from the retirement or disposal of plant and equipment are determined as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognised in the Consolidated Statement of Total Return on the date of retirement or disposal. Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted as appropriate.
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