Al-`Aqar Healthcare REIT Annual Report 2020

Financial Reports 127 2. Significant accounting policies (cont’d) 2.4 Summary of significant accounting policies (cont’d) (o) Unitholders’ capital and unit issuance expenses An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Fund are recorded at the proceeds received, net of direct issue costs. Unitholders’ capital are recorded at the proceeds received, net of direct attributable transactions costs and are classified as equity. Income distribution are recognised in equity in the period in which they are declared. (p) Borrowing costs Borrowing costs consists of interest and other costs that the Group and the Fund incurred in connection with the borrowing of funds. Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditure and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale. All other borrowing costs are recognised in profit or loss in the period they are incurred. (q) Current versus non-current classification The Group and the Fund present assets and liabilities in the statement of financial position based on current/ non-current classification. An asset is current when it is: - Expected to be realised or intended to be sold and consumed in the normal operating cycle; - Held primarily for the purpose of trading; - Expected to be realised within 12 months after reporting period; or - Cash and cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after reporting period. All other assets are classified as non-current. A liability is current when: - It is expected to be settled in the normal operating cycle; - It is held primarily for the purpose of trading; - It is due to be settled within 12 months after reporting period; or - There is no unconditional right to defer the settlement of the liability; for at least twelve months after reporting period. All other liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities. Notes to the Financial Statements For the Year Ended 31 December 2020