2. MATERIAL ACCOUNTING POLICY INFORMATION (continued) 2.2 Revenue recognition (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) Interest income Interest income is recognised using the effective interest method. (c) Dividend income Dividend income is recognised when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Group, and the amount of dividend can be reliably measured. 2.3 Government grants Grants from the government are recognised as a receivable at their fair value when there is reasonable assurance that the grant will be received and the Group will comply with all the attached conditions. Government grants receivable are recognised as income over the periods necessary to match them with the related costs which they are intended to compensate, on a systematic basis. Government grants relating to expenses are shown separately as other income. Government grants relating to assets are recognised as deferred income. 2.4 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) Trustee’s fees Trustee’s fees are recognised on an accrual basis using the applicable formula stipulated in Note 1(a). (c) Manager’s management fees Manager’s management fees are recognised on an accrual basis using the applicable formula stipulated in Note 1(b). 2.5 Borrowing costs Borrowing costs are recognised in the Statement of Total Return using the effective interest method except for those costs that are directly attributable to the construction or development of properties and assets under construction. This includes those costs on borrowings acquired specifically for the construction or development of properties and assets under construction, as well as those in relation to general borrowings used to finance the construction or development of properties and assets under construction. ANNUAL REPORT 2024 85 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024
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