AL-SALAM REIT ANNUAL REPORT 2017

134 AL-SALĀM REIT ANNUAL REPORT 2017 • Level 3 inputs are unobservable inputs for the asset or liability. Foreign Currency The financial statements of the Fund are presented in Ringgit Malaysia (“RM”), the currency of the primary economic environment in which the Fund operates (its functional currency). In preparing the financial statements of the Fund, transactions in currencies other than the functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non- monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profit or loss for the year. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the year except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in other comprehensive income. For such non-monetary items, any exchange component of the gain or loss is also recognised directly in other comprehensive income. Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Fund and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable. (a) Gross rental income Revenue from rental of investment properties, including service charges, are recognised on a straight line basis in accordance with terms and conditions of the tenancy agreement between the Fund and its tenants. (b) Percentage rent Rental income earned from certain tenants include percentage rent clauses whereby rent received and/or receivable is the higher of base rent and a percentage of sales earned by the tenant during the financial year. Percentage rent is recognised when it can be reliably measured by the Fund. (c) Investment income Investment income, which comprise income earned from Islamic fixed deposit placements, are recognised on an accrual basis. NOTES TO THE FINANCIAL STATEMENTS - CONT’D