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for the year ended 30 June 2016
Hyprop Investments Limited
Group annual financial statements 2016
102
NOTES TO THE FINANCIAL STATEMENTS
1.
Accounting policies and presentation of financial statements
1.1
Statement of compliance
The group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), the SAICA
financial reporting guides as issued by the Accounting Practices Committee (APC), Financial Reporting Pronouncements as issued by
the Financial Reporting Standards Council, the JSE Limited Listings Requirements and the requirements of the Companies Act of
South Africa, 2008.
The financial statements of the company are presented separately from the consolidated financial statements and were approved by the
directors on 2 September 2016, the same date as these financial statements. The separate financial statements are available for review and
inspection at the registered office of the company.
1.2 Basis of preparation
The group financial statements have been prepared on the historical cost basis, except for the measurement of investment properties,
investment property classified as held-for-sale and certain financial instruments at fair value, and incorporate the principal accounting policies
set out below.
Item
Measurement basis
Investment property
Fair value
Derivative financial instruments
Fair value
Investment property held-for-sale
Fair value
Fair value adjustments do not affect the determination of distributable earnings, but have an effect on net asset value per share to the extent
that such adjustments are made to the carrying values of assets and liabilities. All accounting policies applied in the preparation of these
financial statements are consistent with those applied in the consolidated financial statements for the year ended 30 June 2015. Various new
accounting standards, or revisions to current accounting standards, have been issued with effective dates applicable to future financial
statements.
Refer to note 1.25 – Standards issued but not yet effective
.
1.3
Basis of consolidation
The group financial statements incorporate the financial statements of the company and entities controlled by the company.
Control is achieved when the company:
•
•
has power over the investee;
•
•
is exposed, or has rights, to variable returns from its involvement with the investee; and
•
•
has the ability to use its power to affect its returns.
The company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of
the three elements of control listed above.
The group financial statements incorporate the assets, liabilities, income, expenses and cash flows of the group. The results of subsidiaries
acquired or disposed of during the year are included in the group financial statements from the date of acquisition or up to the date of
disposal, as applicable. All intra-group transactions, unrealised profits and balances between group entities are eliminated on consolidation.
1.4 Business combinations
The group applies the acquisition method in accounting for business combinations. The consideration transferred by the group to obtain
control of a subsidiary is calculated as the sum of the acquisition date fair values of assets transferred, liabilities incurred and the equity
interests issued by the group, which includes the fair value of any asset or liability arising from the acquisition. Acquisition costs are expensed
as incurred.
The group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been
recognised in the acquiree’s annual financial statements prior to the acquisition. Assets acquired and liabilities assumed are measured at their
acquisition date fair values.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of (a) fair value of
consideration transferred, (b) the recognised amount of any non-controlling interest in the acquiree and (c) acquisition date fair value of any
existing equity interest in the acquiree, over the acquisition date fair values of identifiable net assets. If the fair values of identifiable net assets
exceed the sum calculated above, the excess amount (ie gain on bargain purchase) is recognised in profit or loss immediately.