Notes to the Financial Statements Year ended 31 December 2024 3 MATERIAL ACCOUNTING POLICIES (continued) 3.5 Intangible assets Goodwill For business combinations, the Stapled Group measures goodwill as at acquisition date based on the fair value of the consideration transferred (including the fair value of any pre-existing equity interest in the acquiree) and the recognised amount of any non-controlling interests in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the amount is negative, a gain on bargain purchase is recognised in the total return. Goodwill is subsequently measured at cost less accumulated impairment losses. Goodwill arising from the acquisition of subsidiaries is included in intangible assets. Goodwill is tested annually for impairment as described in Note 3.7. 3.6 Financial instruments (i) Non-derivative financial assets Classification and measurement The Stapled Group classifies their financial assets as financial assets at amortised cost. The classification depends on the Stapled Group’s business model for managing the financial assets as well as the contractual terms of the cash flows of the financial asset. The Stapled Group reclassifies financial assets when and only when its business model for managing those assets changes. At initial recognition A financial asset is recognised if the Stapled Group becomes a party to the contractual provisions of the financial asset. At initial recognition, the Stapled Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in the Statement of Total Return. At subsequent measurement Financial assets at amortised cost Financial assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in interest income using the effective interest rate method. (ii) Cash and cash equivalents Cash and cash equivalents comprise cash balances and bank deposits. For the purpose of the Statement of Cash Flows, pledged deposits are excluded whilst bank overdrafts that are repayable on demand and form an integral part of the Stapled Group’s cash management are included as a component of cash and cash equivalents. 162 CapitaLand Ascott Trust
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