ANNUAL REPORT 2014
69
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
For the financial year ended 31 December 2014
2.
SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(q)
Currency translation
(1)
Functional and presentation currency
Items included in the financial statements of each entity in the Group are measured using the currency
of the primary economic environment in which the entity operates (“the functional currency”). The
consolidated financial statements of the Group are presented in Singapore Dollar, which is the Company’s
functional currency.
(2)
Transactions and balances
Transactions in a currency other than the functional currency (“foreign currency”) are translated into
the functional currency using the exchange rates prevailing at the dates of transactions. Currency
translation differences resulting from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies at the closing rates at the end of
the reporting period are recognised in profit or loss, except for currency translation differences on the
net investment in foreign operations, borrowings in foreign currencies and other currency instruments
designated and qualifying as net investment hedges for foreign operations, which are included in other
comprehensive income and accumulated in the foreign currency translation reserve within equity.
When a foreign operation is disposed of or any borrowings forming part of the net investment of the
foreign operation are repaid, a proportionate share of the accumulated translation differences is
reclassified to profit or loss, as part of the gain or loss on disposal.
Non-monetary items that are measured at fair values in foreign currencies are translated using the
exchange rates at the date when the fair values are determined. Currency translation differences on
non-monetary items whereby gains or losses are recognised in other comprehensive income, such as
equity investments classified as available-for-sale financial assets are included in the fair value reserve.
(3)
Translation of Group entities’ financial statements
The results and financial position of Group entities (none of which has the currency of a hyperinflationary
economy) that are in functional currencies different from the presentation currency are translated into
the presentation currency as follows:
(i)
Assets and liabilities are translated at the closing rates at the reporting date;
(ii)
Income and expenses are translated at average exchange rates (unless this average is not a
reasonable approximation of the cumulative effect of the rates prevailing on the transaction
dates, in which case, income and expenses are translated at the dates of the transactions); and
(iii) All resulting currency exchange differences are recognised in other comprehensive income and
accumulated in currency translation reserve within equity. These currency translation differences
are reclassified to profit or loss on disposal or partial disposal of the entity giving rise to such
reserve.
Goodwill and fair value adjustments arising from the acquisition of a foreign entity on or after 1 January
2005 are treated as assets and liabilities of the foreign entity and translated at the closing rates at the
date of the end of the reporting date. For acquisitions prior to 1 January 2005, the exchange rates at
the dates of the acquisition are used.
