For each acquisition, management considers if a business exists, more specifically if inputs, significant processes and
outputs exist. The inputs are represented by the properties. The outputs are the leases from which rental income is
generated. In terms of processes, management considers if they exist and if they are substantive.
For it to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a
substantive process that together significantly contribute to the ability to creates an output. An acquired process (or
group of processes) shall be considered substantive if, when applied to an acquired input or inputs, it:
(i) is critical to the ability to continue producing outputs, and the inputs acquired include an organized
workforce with the necessary skills, knowledge, or experience to perform that process (or group of processes); or
(ii) significantly contributes to the ability to continue producing outputs and: is considered unique or scarce;
or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs.
Processes such as lease management, selection of tenants, marketing decisions, investment decisions, are seen as
substantive processes that are indicative of the fact that a business combination exists. In assessing whether a
transaction is a business combination, management looks at what has been acquired, rather than the Group’s
subsequent intentions. A transaction is still accounted for as a business combination, even if the Group is interested
mostly in the assets that exist within the business acquired, whereas the processes and management within the business
are disregarded or integrated within the existing structure.
For acquisitions or business combinations, the fair value of the net assets acquired is compared to the consideration
transferred. If the fair value of net assets acquired is lower, the difference is recorded as goodwill. If the consideration is
lower, the difference is recognised directly in the Statement of comprehensive income.
If an acquisition does not qualify as a business combination, the purchase price is allocated to the individual assets and
liabilities. Goodwill or deferred taxes are not recognised.
Business combinations are accounted for using the acquisition method. The acquisition is recognised at the aggregate
amount of the consideration transferred, measured at fair value on the date of acquisition and the amount of any non-
controlling interest in the acquired entity.
For each business combination, the acquirer measures the non-controlling interest in the acquired entity either at fair
value or as a proportionate share of their identifiable net assets. Transaction costs incurred are expensed.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification
and designation, in accordance with the contractual terms, economic circumstances and pertinent conditions on the
date of acquisition.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value on the date of acquisition.
Subsequent changes to the fair value of any contingent consideration classified as a liability will be recognised in the
Statement of comprehensive income. Acquisition accounting is finalised when the Group has gathered all the necessary
information, which must occur within 12 months of the acquisition date. There are no exemptions from the 12-month
rule for deferred tax assets or changes in the contingent consideration.
Transactions with non-controlling interests, where control is maintained, are accounted for as transactions within
equity. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or
received is recognised in the accumulated profit reserve.
4.30 Standards issued but not yet effective and not early adopted
Certain new accounting standards, amendments to accounting standards and interpretations have been published that
are not mandatory for 31 December 2021 reporting periods and have not been early adopted by the Group. These
standards, amendments or interpretations are not expected to have a material impact on the entity in the current or
future reporting periods and on foreseeable future transactions.
Classification of liabilities as current or non-current – Amendments to IAS 1 (issued on 23 January 2020
and effective for annual periods beginning on or after 1 January 2023)
These narrow scope amendments clarify that liabilities are classified as either current or non-current, depending on the
rights that exist at the end of the reporting period. Liabilities are non-current if the entity has a substantive right, at the
end of the reporting period, to defer settlement for at least twelve months. The guidance no longer requires such a right
to be unconditional. Management’s expectations whether they will subsequently exercise the right to defer settlement do
not affect classification of liabilities. The right to defer only exists if the entity complies with any relevant conditions as
of the end of the reporting period. A liability is classified as current if a condition is breached at or before the reporting
date even if a waiver of that condition is obtained from the lender after the end of the reporting period. Conversely, a
loan is classified as non-current if a loan covenant is breached only after the reporting date. In addition, the
amendments include clarifying the classification requirements for debt a company might settle by converting it into
equity. “Settlement” is defined as the extinguishment of a liability with cash, other resources embodying economic
benefits or an entity’s own equity instruments. There is an exception for convertible instruments that might be
converted into equity, but only for those instruments where the conversion option is classified as an equity instrument
as a separate component of a compound financial instrument. The Group is currently assessing the impact of the
amendments on its financial statements.