NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2023 2 BASIS OF PREPARATION (continued) 2.5 Adoption of new accounting standards and amendments (continued) Material accounting policy information The Stapled Group adopted Amendments to SFRS(I) 1-1/FRS 1 and FRS Practice Statement 2: Disclosure of Accounting Policies for the first time in 2023. Although the amendments did not result in any changes to the accounting policies themselves, they impacted the accounting policy information disclosed in the financial statements. The amendments require the disclosure of ‘material’, rather than ‘significant’, accounting policies. The amendments also provide guidance on the application of materiality to disclosure of accounting policies, assisting entities to provide useful, entity-specific accounting policy information that users need to understand other information in the financial statements. Management reviewed the accounting policies and made updates to the information disclosed in Note 3 Material accounting policies (2022: Significant accounting policies) in certain instances in line with the amendments. 3 MATERIAL ACCOUNTING POLICIES The accounting policies set out below have been applied by the CapitaLand Ascott REIT Group, the CapitaLand Ascott BT Group and the Stapled Group consistently to all periods presented in these financial statements, except as explained in Note 2.5 which addresses changes in material accounting policies. In addition, the Stapled Group adopted the Amendments to SFRS(I) 1-1/FRS 1 and FRS Practice Statement 2 Disclosure of Accounting Policies from 1 January 2023. The amendments require the disclosure of ‘material’, rather than ‘significant’, accounting policies. Although the amendments did not result in any changes to the accounting policies themselves, they impacted the accounting policy information disclosed in Note 3 in certain instances (see Note 2.5 for further information). 3.1 Basis of consolidation (i) Stapling Where entities enter into a stapling arrangement, the stapling arrangement is accounted for as a business combination under the acquisition method. (ii) Business combinations Business combinations are accounted for using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Stapled Group. In determining whether a particular set of activities and assets is a business, the Stapled Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs. The Stapled Group has an option to apply a ‘concentration test’ that permits a simplified assessment of whether an acquired set of activities and assets is not a business. The optional concentration test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. The Stapled Group measures goodwill at the acquisition date as: • the fair value of the consideration transferred; plus • the recognised amount of any non-controlling interest (“NCI”) in the acquiree; plus • if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree, over the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. Any goodwill that arises is tested annually for impairment. Overview Sustainability & Governance ANNUAL REPORT 2023 201 Leadership Portfolio & Performance Financial Statements and Other Information
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