2. MATERIAL ACCOUNTING POLICY INFORMATION (continued) 2.8 Investment properties Investment properties are properties held for long-term rental yields and/or for capital appreciation. Investment properties are initially recognised at cost and subsequently carried at fair value thereafter. Fair values are determined in accordance with the Trust Deed, which requires the investment properties to be valued by independent registered valuers at least once a year, in accordance with the CIS Code issued by MAS. Changes in fair values are recognised in the Statement of Total Return. Investment properties are subject to renovations or improvement at regular intervals. The cost of major renovations and improvements is capitalised and the carrying amounts of the replaced components are recognised in the Statement of Total Return. The costs of maintenance, repairs and minor improvements are recognised in the Statement of Total Return when incurred. On disposal of an investment property, the difference between the disposal proceeds and the carrying amount is recognised in the Statement of Total Return. 2.9 Investment in subsidiaries Investment in subsidiaries is carried at cost less accumulated impairment losses in ECW’s Statement of Financial Position. On disposal of such investments, the difference between disposal proceeds and the carrying amounts of the investments are recognised in the Statement of Total Return. 2.10 Impairment of non-financial assets Investment in subsidiaries Investment in subsidiaries is tested for impairment whenever there is any objective evidence or indication that this asset may be impaired. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash inflows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the cash generating unit (“CGU”) to which the asset belongs. If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. The difference between the carrying amount and recoverable amount is recognised as an impairment loss in the Statement of Total Return. 2.11 Financial assets (a) Classification and measurement The Group classifies its financial assets as held at amortised cost. The classification depends on the Group’s business model for managing the financial assets as well as the contractual terms of the cash flows of the financial assets. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest. The Group reclassifies debt instruments when and only when its business model for managing those assets changes. EC WORLD REIT 88 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024
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