Growthpoint Interactive Annual Report 2018

Notes to the Financial Statements continued Office Industrial Total $’000 $’000 $’000 Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2017 Revenue, excluding straight line lease adjustment 160,396 101,067 261,463 Property expenses (23,583) (14,562) (38,145) Net Property Income Segment results 136,813 86,505 223,318 Loss on sale of investment properties - (1,123) (1,123) Net changes in fair value of investment properties 72,221 45,936 118,157 Segment results 209,034 131,318 340,352 Income not assigned to segments 5,405 Expenses not assigned to segments (67,617) Net profit before income tax 278,140 Property values are also reported by segment and this information is reported in note 2.2. Major customer Revenues from one customer, Woolworths Limited, of the Group’s Industrial segment represents $41,400,000 (2017: $45,650,000) of the Group’s total revenues. 2.2 Investment properties Accounting policies Investment property Investment property is property held either to earn rental income or for capital appreciation or both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment properties are initially measured at cost including transaction costs. Costs incurred subsequent to initial acquisition are capitalised when it is probable that future economic benefits in excess of the originally assessed performance of the asset will flow to the entity and the cost of that capital expenditure can be measured reliably. All other costs are expensed in the profit and loss in the period incurred. Subsequent to initial recognition as assets, investment properties are revalued to fair value. Directors revalue the property investments on the basis of valuations determined by them or independent valuers on a periodic basis. The Group assesses at each balance date whether these valuations appropriately reflect the fair value of investment properties. Any gains or losses arising from changes in fair value of the properties are recognised in the consolidated statement of profit or loss and other comprehensive income in the period in which they arise. Lease incentives and commissions Any lease incentives provided to a tenant under the terms of a lease such as fit-outs or rent free periods are recognised as a reduction of revenue on a straight-line basis over the term of the lease. Leasing commissions paid to agents on signing of lease agreements are recognised as a reduction of revenue on a straight-line basis over the term of the lease. Determination of fair value An external, independent valuation company, having appropriate recognised professional qualifications and recent experience in the location and category of property being valued generally, values the Group’s entire investment property portfolio each financial year. The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgably and willingly. 2.1 Revenue and segment information (continued) Segmental information (continued) Growthpoint Properties Australia 2018 Annual Report 64