3 MATERIAL ACCOUNTING POLICY INFORMATION (CONT'D) 3.11 Distribution Policy Manulife US REIT’s distribution policy is to distribute at least 90% of its annual distributable income. The actual level of distribution will be determined at the discretion of the Board of Directors of the Manager. Both distributions made in cash and in Units of the Trust are recorded in the Statements of Changes in Unitholders’ Funds. Pursuant to the Recapitalisation Plan and the Master Restructuring Agreement, Manulife US REIT has halted distributions till 31 December 2025, unless the Early Reinstatement Conditions are achieved earlier. 3.12 Leases – As lessor Leases in which the Group does not transfer substantially all the risks and rewards of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. The accounting policy for rental income is set out in Note 3.8. 3.13 Cash and cash equivalents Cash and cash equivalents comprise cash at bank and short term fixed deposits which are subject to an insignificant risk of changes in value. 3.14 Segment reporting An operating segment is a component of the Group: • that engages in business activities from which it may earn revenue and incur expenses, including revenue and expenses that relate to transactions with any of the Group’s other components; • whose operating results are regularly reviewed by the Chief Executive Officer and the directors of the Manager to make decisions about resources to be allocated to the segment and assess its performance; and • for which discrete financial information is available. The Group’s investment properties comprise commercial office properties located in the United States. Therefore, the Manager considers that the Group operates within a single business segment and within a single geographical segment in the United States. Accordingly, no segment information has been presented in these financial statements. 3.15 New standards and interpretations not adopted A number of new standards and amendments to standards have been issued as of the reporting date but are not yet effective for the financial year ended 31 December 2024. The Group intends to adopt these new and amended standards, if applicable, when they become effective. Description Effective for annual periods beginning on or after • Amendments to IAS 21: Lack of Exchangeability 1 January 2025 • Amendments to IAS 9 and IAS 7: Amendments to the Classification and Measurement of Financial Instruments 1 January 2026 • Annual Improvements to IFRS Accounting Standards – Volume 11 1 January 2026 • IFRS 18: Presentation and Disclosure in Financial Statements 1 January 2027 • IFRS 19: Subsidiaries without Public Accountability – Disclosures 1 January 2027 The Group expects that the adoption of the standards above will have no significant impact on the financial statements in the year of initial application, except for IFRS 18. The Group is currently working to identify all impacts the standard will have on the financial statements and notes to the financial statements. 162 | MANULIFE US REIT NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2024
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