IREIT Global
annual report 2014
For the reporting period from 1 November 2013 (date of constitution) to 31 December 2014
Notes to the
Financial Statements
2.
SIGNIFICANT ACCOUNTING POLICIES
(Continued)
(d) Investment properties
(Continued)
An investment property is derecognised upon disposal or when the investment property
is permanently withdrawn from use and no future economic benefits are expected from
its disposal. Any gain or loss arising on derecognition of the property (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is
included in the profit or loss in the period in which the investment property is derecognised.
(e) Financial instruments
Financial assets and financial liabilities are recognised when a group entity becomes a party
to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction
costs, including front-end fees and commitment fees, that are directly attributable to the
acquisition or issue of financial assets and financial liabilities (other than financial assets
and financial liabilities at fair value through profit or loss) are added to or deducted from the
fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Effective interest rate method
The effective interest rate method is a method of calculating the amortised cost of a debt
instrument and of allocating interest income or expense over the relevant period. The
effective interest rate is the rate that exactly discounts estimated future cash receipts or
payments (including all fees on points paid or received that form an integral part of the
effective interest rate, transaction costs and other premiums or discounts) through the
expected life of the financial instrument, or where appropriate, a shorter period. Interest
income or expense is recognised on an effective interest basis for debt instruments other
than those financial instruments “at fair value through profit or loss”.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Subsequent to initial recognition, loans
and receivables (including trade and other receivables and bank balances and cash) are
measured at amortised cost using the effective interest rate method, less any identified
impairment losses (see accounting policy on impairment loss on financial assets below).
