Investor Presentaiton
68
Fibra INN does not recognize a deferred tax liability for the temporary differences related to investment in
subsidiaries as it controls the reversal of such temporary differences, and it is not probable that they will
be reversed in a foreseeable future. Deferred tax assets arising from temporary differences associated to
such investments and interests are recognized only to the extent that it is probable that sufficient taxable
profit will be available against which the temporary difference can be utilized and the temporary difference
is expected to reverse in the foreseeable future.
h.
Foreign currency transactions-
j.
k.
Foreign currency refers to currency different to Fibra INN's functional currency. Foreign currency transactions
are recorded at the applicable exchange rate in effect at the transaction date. Monetary assets and liabilities
denominated in foreign currency are translated into Mexican pesos at the applicable exchange rate in effect
at the balance sheet date. Exchange fluctuations are recorded in the consolidated income statement.
Share-based payments-
Payments to employees that are made with equity shares are measured at fair value of the equity
instruments at the date of grant. The fair value, determined at the grant date of the payment based on
equity, is recognized in profit or loss based on the straight-line method over the period when the employee
provides the related service, based on the estimate of equity instruments that management believes the
employee will ultimately acquire, with a corresponding increase in equity. At the end of each reporting
period, the Company revises its estimate of the number of equity instruments that are expected vest.
The impact of the revision of the original estimates, if any, is recognized in the income of the period such
that the cumulative expense reflects the revised estimate, with a corresponding adjustment in equity.
Basic and diluted earnings per CBFIS-
Basic earnings per CBFI are determined by dividing the consolidated income with the weighted average of
outstanding CBFIs of the period. Diluted earnings per CBFIs are determined by adding to the total of
258,334,218 outstanding CBFIs during the period, the 3,000,000 CBFIs correspondent to the equity-based
compensation (see note 9d), which will vest if certain conditions established for the elegible executives
are met.
Segment information-
Operating segments are defined as components of an entity, oriented to the provision of services that
are subject to risks and benefits. The Trust is mainly involved in four segments: Northeast, South Central,
West and North.
Business operating segments are grouped according to the geographical areas where they operate. For
internal and organizational purposes, each segment performs the administration and supervision of all of
its activities, which refer to the provision of lodging services and leasing of properties. Accordingly,
management of Fibra INN internally evaluates the results and performance of each business for purposes
of decision-making. Following this approach, in the daily operations, financial resources are allocated on
an operational basis for each segment.
4.
a.
Critical accounting judgements and key sources of estimation uncertainty
In the application of the accounting policies of Fibra INN, as described in note 3, management is required
to make judgments, estimates and assumptions about the carrying amount of certain assets and liabilities.
Estimates and assumptions are based on historical experience and other factors considered relevant. The
actual results may differ from these estimates.
The related estimates and assumptions are reviewed continuously. Changes to accounting estimates are
recognized in the period in which the estimate is changed if the change affects solely that period, or the
current period and future periods if the change affects both current and future periods.
Critical judgements in the application of accounting policies-
The following are the critical judgments, other than those involving estimates (see below), that management
has developed in the process of applying the accounting policies of Fibra INN and which have the most
significant effect on the amounts recognized in the consolidated financial statements.
Classification of leases
Leases are classified according to the extent that risks and rewards of ownership of the leased asset are
transferred to Fibra INN or the lessee, based on the substance of the transaction, rather than its legal form.
Based on an evaluation of the terms and conditions of the agreements, Fibra INN has determined that it
maintains substantially all the risks and significant rewards of ownership of these goods and, therefore, it
has classified its leases as operating leases.
Business combinations or acquisition of assets
Management based on its professional judgment has determined that the acquisition of a hotel represents
the acquisition of an asset and not a business combination. This determination may have a significant
impact in how the acquired assets and assumed liabilities are accounted for, both at the initial recognition
and subsequently.
Fibra INN recognizes the acquired assets at the time when the inherent risks and benefits to the operation
of the hotels are transered.
Classification of a hotel (investment property/assets)
The management of the Trust uses its professional judgment to determine the appropriate classification
of both the contributed and acquired hotels, as property, furniture and equipment, over the basis that the
hotels are used in the normal course of business, and therefore, they do not qualify as investment properties.
Income taxes
In order to continue to be eligible as a FIBRA for income tax purposes, the Trust must comply with certain
requirements of this tax regime, which relate to issues such as the annual distribution of at least 95 percent
of taxable income. According to the Trust, it will continue to be eligible under the FIBRA tax regime.
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