Notes to the Financial Statements For the financial year ended 31 December 2025 2. MATERIAL ACCOUNTING POLICY INFORMATION 2.1 Basis of preparation The financial statements are prepared in accordance with the recommendations of Statement of Recommended Accounting Practice (“RAP”) 7 “Reporting Framework for Investment Funds” issued by the Institute of Singapore Chartered Accountants, applicable requirements of the CIS Code issued by the MAS and the provisions of the Trust Deed. RAP 7 requires that accounting policies adopted should generally comply with the recognition and measurement principles of Singapore Financial Reporting Standards (“FRS”). 2.2 Basis of measurement The financial statements are prepared on the historical cost basis, except for investment properties (including right-of-use assets and investment properties held for divestment), investments at fair value through profit or loss (“FVTPL”), amount due to non-controlling interest and derivative financial instruments, which are stated at fair value as described in Note 30. As at 31 December 2025, the current liabilities of the Group exceeded its current assets by $318.4 million. This is primarily due to the classification of certain borrowings amounting to $641.6 million as current liabilities as they are maturing in 2026. Notwithstanding the net current liabilities position, based on the Group’s available financial resources and sources of funding, the Manager is of the view that the Group will be able to refinance its borrowings and meet its current financial obligations as and when they fall due. The financial statements have been prepared on the basis that the Group and the Trust will continue to operate as a going concern. 2.3 Functional and presentation currency The financial statements are presented in Singapore dollars (“$”), which is the Trust’s functional currency. All financial information presented in Singapore dollars has been rounded to the nearest thousand, unless otherwise stated. 2.4 Changes in accounting policies The accounting policies adopted are consistent with those of the previous financial year except that in the financial year, the Group has adopted all the new and revised standards that are effective for annual financial period beginning on 1 January 2025. The adoption of these standards did not have any significant effect on the financial performance or position of the Group and the Trust. 2.5 Standards issued but not yet effective The Group has not adopted the following standards applicable to the Group that have been issued but are not yet effective. Description Effective for annual periods beginning on or after Amendments to FRS 109 and FRS 107: Amendments to the Classification and Measurement of Financial Instruments 1 January 2026 Amendments to FRS 109 and FRS 107: Contracts Referencing Nature-dependent Electricity 1 January 2026 Annual Improvements to FRSs – Volume 11 1 January 2026 FRS 118: Presentation and Disclosure in Financial Statements 1 January 2027 Amendments to FRS 110 and FRS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture To be determined 160 ESR-REIT ANNUAL REPORT 2025
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