NOTES TO THE
FINANCIAL STATEMENTS
Year ended 31 December 2014
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.8 Income tax expense (cont’d)
The above tax transparency treatment does not apply to gains from disposal of any properties such as real estate
properties, shares, etc that are determined by the IRAS to be revenue gains chargeable to tax. Tax on such gains
or profits will be subject to tax, in accordance to Section 10(1)(a) of the Income Tax Act (Cap 134) and collected
from the Trustee. Where the gains are capital gains, they will not be subject to tax and the Trustee and the Manager
may distribute the capital gains without tax being deducted at source.
3.9 Distribution policy
The Trust has a distribution policy to distribute at least 90.0% of its taxable income, other than gains from the sale
of real estate properties that are determined by IRAS to be trading gains, and net overseas income, with the actual
level of distribution to be determined at the Manager’s discretion. For the taxable income that is not distributed,
referred to as retained taxable income, tax will be assessed on the Trustee. Where such retained taxable income
is subsequently distributed, the Trustee need not deduct tax at source.
Net overseas income refers to the net profits (excluding any gains from the sale of property or shares, as the case
may be) after applicable taxes and adjustment for non-cash items such as depreciation derived by the Trust from
its properties, if any.
Distributions to Unitholders are made on a quarterly basis, with the amount calculated as at 31 March, 30 June,
30 September and 31 December each year for the three-month period ending on each of the said dates. In
accordance with the provisions of the Trust Deed, the Manager is required to pay distributions within 75 days after
the end of the first three distribution periods of a financial year and within 90 days from the end of a financial year.
Distributions, when paid, will be in Singapore dollars.
3.10 Earnings per unit
The Group presents basic and diluted earnings per unit (“EPU”) data for its units. Basic EPU is calculated by
dividing the total return for the period after tax by the weighted average number of units outstanding during the
period, adjusted for own units held. Diluted EPU is determined by adjusting the total return for the period after tax
and the weighted average number of units outstanding, adjusted for own units held, for the effects of all dilutive
potential units.
3.11 Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s
other components. All operating segments’ operating results are reviewed regularly by the Manager’s CEO to make
decisions about resources to be allocated to the segment and assess its performance, and for which discrete
financial information is available.
Segment results include items directly attributable to a segment as well as those that can be allocated on a
reasonable basis. Unallocated items comprise mainly corporate assets and expenses, and tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the year on additions to investment properties that
are expected to be used for more than one year.
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PA R K WAY L I F E R E I T
