130 | CapitaLand Limited Annual Report 2014
Appendix
Notes to the Financial Statements
Year ended 31 December 2014
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(cont’d)
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(cont’d)
Share-based payments
For equity-settled share-based payment transactions, the fair value of the services received is recognised
as an expense with a corresponding increase in equity over the vesting period during which the employees
become unconditionally entitled to the equity instrument. The fair value of the services received is determined
by reference to the fair value of the equity instrument granted at the grant date. At each reporting date,
the number of equity instruments that are expected to be vested are estimated. The impact on the revision
of original estimates is recognised as an expense and as a corresponding adjustment to equity over the
remaining vesting period, unless the revision to original estimates is due to market conditions. No adjustment
is made if the revision or actual outcome differs from the original estimate due to market conditions.
For cash-settled share-based payment transactions, the fair value of the goods or services received is
recognised as an expense with a corresponding increase in liability. The fair value of the services received
is determined by reference to the fair value of the liability. Until the liability is settled, the fair value of the
liability is re-measured at each reporting date and at the date of settlement, with any changes in fair value
recognised for the period.
The proceeds received from the exercise of the equity instruments, net of any directly attributable transaction
costs, are credited to share capital when the equity instruments are exercised.
2.13 Provision
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outnow of economic benemts will be required to
settle the obligation.
A provision for onerous contract is recognised when the expected benemts to be derived by the Group from
a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision
is measured at the present value of the lower of the expected cost of terminating the contract and the
expected net cost of continuing with the contract. Before a provision is established, the Group recognises
any impairment loss on the assets associated with the contract.
2.14 Leases
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Leased assets in which the Group assumes substantially all the risks and rewards of ownership are classimed
as mnance leases. Upon initial recognition, property, plant and equipment acquired through mnance leases are
capitalised at the lower of their fair value and the present value of the minimum lease payments. Subsequent
to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to
that asset. Leased assets are depreciated over the shorter of the lease term and their useful lives. Lease
payments are apportioned between mnance expense and reduction of the lease liability. The mnance expense
is allocated to each period during the lease term so as to produce a constant periodic rate of interest over
the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum
lease payments over the remaining term of the lease when the lease adjustment is conmrmed.
At inception, an arrangement that contains a lease is accounted for as such based on the terms and conditions
even though the arrangement is not in the legal form of a lease.
When entities within the Group are lessees of an operating lease
Where the Group has the use of assets under operating leases, payments made under the leases are
recognised in promt or loss on a straight-line basis over the term of the lease. Lease incentives received are
recognised as an integral part of the total lease payments made. Contingent rentals are charged to the promt
or loss in the accounting period in which they are incurred.
When entities within the Group are lessors of an operating lease
Assets subject to operating leases are included in either property, plant and equipment (note 2.4) or investment
properties (note 2.6).
