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1. Accounting policies and presentation of annual financial statements
continued
1.24 Key estimations and uncertainties
continued
Fair value of financial instruments
continued
Subsequent to initial recognition, the fair values of financial instruments measured at fair value that are quoted in active markets
are based on bid prices for assets. When quoted prices are not available, fair values are determined using valuation techniques
that refer as far as possible to observable market inputs, either directly or indirectly.
The impact of discounting is not material for short-term loans, trade debtors and creditors.
For more information, refer to notes 10, 11, 19 and 21.
Interests in co-ownerships
Judgement is required to identify the relevant activities of the co-ownerships. Interests in co-ownerships are seen as interests
in joint operations. There is a sharing of control of the co-ownership and decisions regarding major capital expenditure projects
require unanimous consent by the parties sharing control.
In terms of the co-ownership agreements for Canal Walk, The Glen and Stoneridge (prior to its disposal), material capital
expenditure requires mutual consent of the co-owners. In view of the significant increases in development costs, most capital
expenditure that is undertaken is material and accordingly these centres are not considered to be solely controlled by Hyprop.
The interests in these centres are therefore treated as joint operations.
Impairment of assets
The group tests whether assets have suffered any impairments in accordance with the impairment accounting policy.
Recoverable amounts of cash-generating units have been determined based on estimated future cash flows discounted to their
present values using the appropriate rates. Estimates are based on management forecasts.
Trade receivables
Management identifies impairments of trade receivables on an ongoing basis. Impairment adjustments are raised against trade
receivables when collectability is considered doubtful.
For more information, refer to note 11.
Deferred taxation
Deferred taxation assets are raised to the extent that it is probable that future taxable profit will be available against which the
unused taxation credits can be utilised. Assessment of future taxable income is performed in the form of estimated future cash
flows using a suitable growth rate.
For more information, refer to note 20.
Phantom scheme liability
The liability is calculated based on the year-end market value of the Hyprop share (2014: combined unit). The actual payment is
based on a 30-day volume weighted average price to 30 March.
Equity-settled share-based employee remuneration
Judgement is required in the determination of the fair value on grant date of equity-settled share-based employee remuneration.
Management utilises the Black Scholes model in determining the fair value at grant date.
Amortisation of debenture premium
The risk adjustment applied to the discount rate used in the amortisation of debenture premium requires a measure of
judgement.
Business combinations
Management uses valuation techniques in determining the fair values of the various elements of a business combination (see
note 1.4). Particularly, the fair value of contingent consideration is dependent on the outcome of many variables including the
acquiree’s future profitability, refer to note 34.
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Hyprop Investments Limited
Integrated Report 2015