205 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2023 FINANCIAL STATEMENTS 2. Basis of preparation and material accounting policies (cont'd.) 2.4 Material accounting policies (cont'd.) (a) Basis of consolidation (cont'd.) Investment in subsidiary - separate financial statements In the Fund’s separate financial statements, investments in subsidiary is accounted for at cost less impairment losses if any. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss. (b) Revenue recognition (i) Rental income The Group and the Fund earn revenue from acting as a lessor in operating leases which do not transfer substantially all of the risks and rewards incidental to ownership of an investment property. Rental income arising from operating leases on investment property is accounted for on a straight-line basis over the lease term and is included in revenue in the statement of profit or loss due to its operating nature, except for contingent rental income which is recognised when it arises. Initial direct costs incurred in negotiating and arranging an operating lease are recognised as an expense over the lease term on the same basis as the lease income. (a) Gross rental income Revenue from rental of investment properties, including service charges, are recognised on a straight line basis over the period of the lease term in accordance with terms and conditions of the tenancy agreement between the Group and its tenants. (b) Percentage rent Rental income earned from certain tenants include percentage rent clauses whereby rent received and/or receivable is the higher of base rent and a percentage of sales earned by the tenant during the financial year. Percentage rent is recognised when it can be reliably measured by the Group. (ii) Other income Revenue is measured based on the consideration specified in a contract with a customer and exclude amounts collected on behalf of third parties. The Group and the Fund recognise revenue when or as it transfer control over a product or service to customer. An asset is transferred when (or as) the customer obtains control of the asset. An entity transfer control of a good or service over time and, therefore, satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met: (i) The customer simultaneously receives and consumes the benefits provided by the entity’s performance as the entity performs; or (ii) The entity’s performance creates or enhances an asset (for example, work in progress) that the customer controls as the asset is created or enhanced; or (iii) The entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for payment completed to date.
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