FRASERS HOSPITALITY TRUST ANNUAL REPORT 2015
145
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 20 JUNE 2014 (DATE OF CONSTITUTION) TO 30 SEPTEMBER 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
The financial statements of FHT comprise the FH-REIT Group and FH-BT.
The financial statements of FH-REIT Group and the Stapled Group have been prepared in accordance with the
recommendations of Statement of Recommended Accounting Practice (“RAP”) 7 “Reporting Framework for Unit
Trusts” issued by the Institute of Singapore Chartered Accountants, the applicable requirements of the Code
on Collective Investment Schemes (the “CIS Code”) issued by the Monetary Authority of Singapore (the “MAS”)
and the provisions of the FH-REIT Trust Deed and the Stapling Deed. RAP 7 requires the accounting policies to
generally comply with the principles relating to recognition and measurement under the Singapore Financial
Reporting Standards (“FRS”).
The financial statements of FH-BT have been prepared in accordance with FRS.
The financial statements are presented in Singapore dollars (“SGD”), which is the functional currency of FH-REIT
and FH-BT and rounded to the nearest thousand ($’000), unless otherwise stated, and have been prepared on a
historical cost basis except as disclosed in the accounting policies below.
The accounting policies set out below have been applied consistently by the Stapled Group.
Significant accounting judgements and estimates
The preparation of financial information in conformity with RAP 7 requires the Manager to make judgements,
estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates. These estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period
in which the estimate is revised and in any future periods affected.
(a)
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the
reporting date that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below:
Valuation of investment properties
The Stapled Group’s investment properties are stated at their estimated market values, which are
determined annually. The fair values are based on independent professional valuations conducted
annually. The fair value of investment properties is determined using discounted cash flow method and
gross realisation method. These estimated market values may differ from the prices at which the Stapled
Group’s investment properties could be sold at a particular time, since actual selling prices are negotiated
between willing buyers and sellers. Also, certain estimates require an assessment of factors not within
the directors’ control, such as overall market conditions. As a result, actual results of operations and
realisation of these investment properties could differ from the estimates set forth in these financial
statements, and the difference could be significant. The carrying amount of investment properties is as
disclosed in the Statements of Financial Position.
(b)
Critical judgements made in applying accounting policies
In the process of applying the Stapled Group’s accounting policies, the Manager has made the following
judgements, apart from those involving estimations, which have significant effects on the amounts
recognised in the consolidated financial statements.
