SECTION 09 pg. 254 AL-SALĀM REIT NOTES TO THE FINANCIAL STATEMENTS - 31 December 2025 2. Basis of preparation and material accounting policies (Cont’d) 2.4 Material accounting policies (Cont’d) (b) Revenue recognition (Cont’d) (i) Rental income (Cont’d) (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 Group. (ii) Other income Revenue is measured based on the consideration specified in a contract with a customer and exclude amounts collected on behalf of third parties. The Group and the Fund recognise revenue when or as it transfer control over a product or service to customer. An asset is transferred when (or as) the customer obtains control of the asset. An entity transfer control of a good or service over time and, therefore, satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met: (i) The customer simultaneously receives and consumes the benefits provided by the entity’s performance as the entity performs; or (ii) The entity’s performance creates or enhances an asset (for example, work in progress) that the customer controls as the asset is created or enhanced; or (iii) The entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for payment completed to date. If a performance obligation is not satisfied over time, an entity satisfied the performance obligation at a point in time. (a) Parking income and event and advertising income Parking income and events and advertising income are recognised on an accruals basis in the accounting period in which the services are being rendered. (b) Investment income Investment income, which comprise income earned from Islamic fixed deposit placements, are recognised on an accrual basis. (c) Income distribution Income distributions are recognised as a liability when they are approved by Trustee and the board of directors of the Manager. Interim distributions are deducted from unitholders’ funds when they are paid. Income distribution to unitholders that are declared after the reporting period are not recognised as a liability at the end of the reporting period.
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