Financial report Consolidated annual financial statements: Notes to the consolidated annual financial statements Investment portfolio
Investment portfolio
Critical estimates and assumptions
The properties are measured at fair value, determined in accordance with the provisions of IFRS 13. The valuations are based on various estimates and assumptions, which are explained in the “Valuation details” section of this note. A qualitative analysis of the sensitivity of the fair values of investment properties to a change in inputs and a quantitative analysis of the sensitivity of fair values to a change in the discount and capitalisation rates are also shown.
4. Net rental income
Rental income can be broken down as follows: TCHF
2018
2017
Accounting principles
Income from the rental of properties includes net rental income, i.e. target rental income less rents lost due to vacancies. In the case of rental agreements classed as operating leases, rents are recognised on an accrual basis over the term of the lease. If the tenants are provided with significant incentives (e.g. tenant-specific finishings or rent-free periods), the cost of such incentives is recognised over the lease term on a straight-line basis as an adjustment of the rental income. At present, Mobimo has no rental agreements classed as finance leases. Direct expenses contains all costs relating to maintenance and administration (including building superintendent remuneration, marketing and property taxes) that cannot be passed on to tenants. Significant costs incurred in obtaining a rental agreement are capitalised and recognised as an expense over the term of the contract.
Commercial properties
75,126
76,409
Residential properties
34,510
30,344
Income from rental of investment properties
109,637
106,753
4,488
4,261
Total income from rental of properties
114,124
111,014
Commercial properties
–13,192
–11,192
Trading properties1
Losses on receivables commercial properties
–446
169
Residential properties
–5,757
–5,224
Losses on receivables residential properties Investment property expense
Rented trading properties1 Losses on receivables from trading properties1 Total direct expenses for rented properties Net rental income 1 Rental
–90
–111
–19,485
–16,359
–593
–467
–75
–48
–20,153
–16,875
93,971
94,140
income or expenses from development properties or properties acquired for resale, see Note 9.
66
Mobimo Annual Report 2018