71
LIPPO MALLS INDONESIA RETAIL TRUST ANNUAL REPORT 2014
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Basis of presentation
The consolidated financial statements include the financial statements made up to the end of the reporting year of
the Trust and all of its subsidiaries. The consolidated financial statements are the financial statements of the Group in
which the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented as
those of a single economic entity and are prepared using uniform accounting policies for like transactions and other
events in similar circumstances. All significant intragroup balances and transactions, including income, expenses and
cash flows are eliminated on consolidation. Subsidiaries are consolidated from the date the reporting entity obtains
control of the investee and cease when the reporting entity loses control of the investee. Control exists when the
group has the power to govern the financial and operating policies so as to gain benefits from its activities.
Changes in the group’s ownership interest in a subsidiary that do not result in the loss of control are accounted for
within equity as transactions with owners in their capacity as owners. When the group loses control of a subsidiary
it derecognises the assets and liabilities and related equity components of the former subsidiary. Any gain or loss is
recognised in profit or loss. Any investment retained in the former subsidiary is measured at its fair value at the date
when control is lost and is subsequently accounted for as available-for-sale financial assets in accordance with FRS 39.
Basis of preparation of financial statements
The preparation of financial statements in conformity with generally accepted accounting principles requires the
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting year. Actual results could differ from those estimates. The estimates and assumptions
are reviewed on an ongoing basis. Apart from those involving estimations, management has made judgements in
the process of applying the entity’s accounting policies. The areas requiring management’s most difficult, subjective
or complex judgements, or areas where assumptions and estimates are significant to the financial statements,
are disclosed at the end of this footnote, where applicable.
Revenue recognition
The revenue amount is the fair value of the consideration received or receivable from the gross inflow of economic
benefits during the reporting year arising from the course of the ordinary activities of the entity and it is shown net
of any related sales taxes and discounts. Revenue is recognised as follows:
Rental income from operating leases
Rental revenue is recognised on a time-proportion basis that takes into account the effective yield on the asset on a
straight-line basis over the leased term.
Interest income
Interest revenue is recognised on a time-proportion basis using the effective interest rate.
Dividend income
Dividend from equity instruments is recognised as income when the entity’s right to receive payment is established.
Revenue from rendering of services
Revenue from rendering of services that are short of duration is recognised when the services are completed.
Notes to the Financial Statements
(Cont’d)
31 December 2014
