AL-SALAM REIT ANNUAL REPORT 2018

AL-SALĀM REIT ANNUAL REPORT 2018 130 Subsequent to initial recognition, all inancial liabilities are measured at amortised cost using the efective proit method except for the derivatives in a loss position which are measured at fair value through proit or loss at the end of each reporting period. For inancial liabilities other than the derivatives, gains and losses are recognised in proit or loss when the liabilities are derecognised, and through the amortisation process. Gains or losses arising from changes in fair value of the derivatives that does not qualify for hedge accounting are recognised in proit or loss within other income/(losses), net. Net gains or losses on derivatives include exchange diferences. Islamic inancing are classiied as current liabilities unless the Group and the Fund have an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period. All other borrowing costs are recognised in proit or loss in the period in which they are incurred. Fees paid on the establishment of Islamic inancing facilities are recognised as transaction costs of the Islamic inancing to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw- down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates. A inancial liability is derecognised when the obligation under the liability is extinguished. When an existing inancial liability is replaced by another from the same lender on substantially diference terms, or the terms of an existing liability are substantially modiied, such an exchange or modiication is treated as derecognition of the original liability and the recognition of a new liability, and the diference in the respective carrying amounts is recognised in proit or loss. From 1 January 2018, when Islamic inancing measured at amortised cost is modiied without this resulting in derecognition, any gains or losses, being the diference between the original contractual cash lows and the modiied cash lows discounted at the original efective proit rate, shall be recognised immediately in proit or loss in inance cost. Ofsetting of inancial instruments Financial assets and inancial liabilities are ofset and the net amount is reported in the statements of inancial position if there is a currently enforceable legal right to ofset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. Cash and Cash Equivalents The Group and the Fund adopt the indirect method in the preparation of the statements of cash lows. Cash and cash equivalents comprise cash and bank balances, term deposits and other short-term, highly liquid investments that are readily convertible into cash with insigniicant risk of changes in value, and excludes amounts which are restricted for general use. Segment Reporting For management purposes, the Group and the Fund are organised into operating segments based on industry which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the Manager of the Group and the Fund who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 23, including the factors used to identify the reportable segments and the measurement basis of segment information.