110 / 160
NOTES TO THE FINANCIAL STATEMENTS
continued
for the year ended 30 June 2016
Hyprop Investments Limited
Group annual financial statements 2016
108
1.
Accounting policies and presentation of financial statements
continued
1.17 Foreign currency
continued
Foreign currency translation reserve
Foreign currency differences on translation of the financial position and results of a foreign operation into Rand are recognised in other
comprehensive income, in the foreign currency translation reserve (FCTR). When a foreign operation is disposed of, in part or in full, the
relevant amount in the FCTR is transferred to profit and loss as part of the profit or loss on disposal.
1.18 Employee benefits
Short-term benefits
The cost of short-term employee benefits is recognised as an expense during the period in which the employees render the related service.
Short-term employee benefits are measured on an undiscounted basis. The accrual for employee entitlements to salaries, bonuses and annual
leave represents the amount which the group has a present legal or constructive obligation to pay as a result of the employees’ services
provided up to the reporting date.
Long-term benefits
Equity-settled share-based employee remuneration
The group operates equity-settled share-based conditional unit plans (CUP) for its employees.
All goods and services received in exchange for the grant of any share-based payment are measured at their fair values. Where employees are
rewarded using share-based payments, the fair value of employees’ services is determined indirectly by reference to the fair value of the
equity instruments granted. This fair value is appraised at the grant date and excludes the impact of non-market vesting conditions.
All share-based remuneration is ultimately recognised as an expense in profit or loss, with a corresponding increase in equity. If vesting periods
or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of
shares expected to vest.
Post-employment benefits
Defined contribution plan
A defined contribution plan is a post-employment benefit plan under which the group pays contributions to a separate entity and has no
legal or constructive obligation to pay further amounts if the fund does not hold sufficient assets to pay all employees the benefits relating
to employee service in the current and prior periods.
The contributions are recognised as an employee benefit expense when the related services have been rendered.
1.19 Revenue
Property portfolio revenue
Property portfolio revenue comprises contractual
rental income, operating cost recoveries, income from marketing and promotions and
parking income. Contractual rental income (including tenant parking income) is recognised on a straight-line basis over the term of the lease.
Income from marketing, promotions and casual parking is recognised when the amounts can be reliably measured.
Turnover rentals (variable rentals based on the turnover achieved by a tenant) are included in revenue when the amounts can be reliably
measured.
Interest received
Interest earned on cash invested with financial institutions is recognised on an accrual basis using the effective interest method.
1.20 Borrowing costs
Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of that
asset until such time as the asset is substantially ready for its intended use.
Qualifying assets are those that necessarily take a substantial period of time to prepare for their intended use.
The amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on funds specifically borrowed in respect of
the qualifying asset. Investment income earned on the temporary investment of borrowings pending their expenditure on qualifying assets
is deducted from the borrowing cost capitalised. Capitalisation ceases when substantially all the activities necessary to prepare the qualifying
asset for its intended use are complete.
All other borrowing costs are recognised as an expense in the period in which they are incurred.