Investor Presentaiton
66
When an impairment loss is reversed subsequently, the carrying amount of the asset (or cash-generating
unit) is increased to the revised estimate of its recoverable amount, in such a way that the increased
carrying amount does not exceed the carrying amount that would have been determined if an impairment
loss had not been recognized for such asset (or cash-generating unit) in prior years.
During the period, Fibra INN has not recognized any impairment losses.
iii. Short term benefits
d.
Provisions-
Provisions are recognized when there is a present obligation as a result of a past event, which will probably
result in an outflow of economic resources, and can be reasonably estimated. For purposes of accounting,
the amount is discounted to present value when the discount effect is significant. Provisions are classified
as current or non-current based on the estimated period to meet the obligations that are covered. When
the recovery from a third party is expected for some or all of the economic benefits required to settle a
provision, an account receivable is recognized as an asset if it is virtually certain that the payment will be
received and the amount of the account receivable can be valued reliably.
e.
Employee benefits-
i.
Defined benefit plans
A defined benefit plan is a benefit plan at the end of a labor relationship different from one of defined
contributions. The Trust's net obligations with respect to the defined-benefit pension plans are
calculated separately for each plan, estimating the amount of future benefit accrued by employees
in return for their services in ongoing and past periods; that benefit is discounted to determine its
present value, and the costs for the services that have not been recognized and the fair value of the
plan assets are deducted. The discount rate is the yield at the reporting date of the government bonds
that have maturity dates approximate to the maturities of the Trust's obligations which are denominated
in the same currency in which benefits are expected to be paid. The calculation is performed annually
by a qualified actuary using the projected unit credit method.
Fibra INN recognizes the actuarial gains and losses arising from the defined benefit plans in the income
statement, in the period in which they occur.
f.
g.
Short-term employee benefit obligations are valued on a basis without discount and are expensed as
the respective services are rendered. A liability is recognized for the amount expected to be paid under
short-term cash bonuses plans if the Trust has a legal or assumed obligation to pay these amounts as
a result of past services provided by the employee and the obligation can be estimated reliably.
Revenue recognition-
Starting from December 26, 2013 revenue is obtained by the operation of hotels and includes rental of
rooms (lodging), rental of property and other revenue, which are recognized when the services are rendered.
Starting from December 26, 2013 Fibra INN recognizes revenue for leasing of rooms (lodging) in the income
statement as identified by its legal form. Nevertheless, such revenue is recognized in accordance to the
recognition criteria for the rendering of services, that is, when the amount and the costs of the transaction
can be measured reliably; it is probable that the economic benefits associated with the transaction will
flow to the entity and the lodging services have been rendered.
Revenue from property leasing is recognized for the rents obtained. These revenues are recognized on a
straight-line basis over the terms of the contract at the moment in which the service is accrued, when
the amounts and the costs related to the transaction can be measured reliably and it has been determined
that is probable that the economic benefits will flow to the Trust. The term of the lease is the non-cancellable
period for which the lessee has contracted to lease the asset together with any further terms for which
the lessee has the option to continue to lease the asset, with or without further payment, when at the
inception of the lease it is reasonably certain that the lessee will exercise the option. Revenue obtained
from contingent rents (such as performance level of the properties) are recognized when meeting the
conditions that result in the economic benefits flowing to the Trust are probable and the amount of the
transaction can be reliably estimated.
Income taxes-
ii.
Termination benefits
Termination benefits are recognized as an expense when the Trust's commitment can be evidenced,
without real possibility of reversing, with a detailed formal plan either to terminate employment
before the normal retirement date, or else, to provide benefits for termination as a result of an offer
that is made to encourage voluntary retirement. The benefits from termination in cases of voluntary
retirement are recognized as an expense, solely if the Trust has made an offer of voluntary retirement,
the offer is likely to be accepted, and the number of acceptances can be estimated reliably. If the
benefits are payable no later than 12 months after the reporting period, then they are discounted
at present value.
As mentioned in Note 1, the Trust is eligible for and intends to maintain its current status as a "Fideicomiso
de Inversiones en Bienes Raices" (FIBRA) for income tax purposes and, therefore, does not recognize a
provision for income taxes. However its subsidiary is subject to income taxes and therefor the consolidated
financial statements reflect the associated impacts. Deferred income taxes are recognized over the
temporary differences between the carrying amount of assets and liabilities included in the financial
statements, and their corresponding tax values, which are used to determine the tax result, applying the
corresponding tax rates to the expected reversal of these differences.
A deferred tax asset is recognized for all deductible temporary differences, to the extent probable that
Fibra INN dispose of future taxable profit against which the deductible temporary differences can be utilized.
These assets and liabilities are not recognized when the temporary differences arise from goodwill or the
initial recognition (other than in a business combination) of other assets and liabilities in a transaction that
does not affect the accounting or tax result.
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