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EC World Real Estate Investment Trust ANNUAL REPORT 2016
NOTES TO THE
Financial Statements
For the Financial Year ended 31 December 2016
2.
Significant accounting policies (continued)
2.1 Basis of preparation (continued)
Interpretations and amendments to published standards effective in 2016
On 1 January 2016, the Group adopted the new or amended FRS and Interpretations of FRS (“INT FRS”) that are
mandatory for application for the financial year. Changes to the Group’s accounting policies have been made as
required, in accordance with the relevant transitional provisions in the respective FRS and INT FRS.
The adoption of these new or amended FRS and INT FRS did not result in substantial changes to the accounting
policies of the Group and had no material effect on the amounts reported for the current financial year or prior
financial period.
2.2 Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the rendering of services and is
presented net of goods and services tax, rebates and discounts. The Group recognises revenue when the amount
of revenue and related cost can be reliably measured, it is probable that the collectability of the related receivables
is reasonably assured and when the specific criteria for each of the Group’s activities are met as follows:
(a) Rental income from operating leases
Rental income from operating leases (net of any incentives given to the lessees) on investment properties
are recognised on a straight-line basis over the lease term.
(b) Warehouse management fee income
Warehouse management fee income is recognised when services are rendered.
(c) Interest income
Interest income is recognised on a time proportion basis using the effective interest method.
(d) Dividend income
Dividend income is recognised when the right to receive payment is established.
2.3 Expenses
(a) Property expenses
Property expenses are recognised on an accrual basis. Included in property expenses are Property Manager’s
fees which are based on the applicable formula stipulated in Note 1(e).
(b) Borrowing costs
Interest expense and similar charges are recognised in the period in which they are incurred using the
effective interest method.