Positioning for the Future | 121
Appendix
Notes to the Financial Statements
Year ended 31 December 2014
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(cont’d)
2.3 Foreign currencies
Foreign currency transactions
Items included in the mnancial statements of each entity in the Group are measured using the currency that
best renects the economic substance of the underlying events and circumstances relevant to that entity
(the functional currency).
Transactions in foreign currencies are translated to the respective functional currencies of the Group’s entities
at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign
currencies at the end of the reporting period are retranslated to the functional currency at the exchange
rate prevailing at that date. Non-monetary assets and liabilities denominated in foreign currencies that are
measured at fair value are retranslated to the functional currency at the exchange rate at the date on which
the fair value was determined. Non-monetary items in a foreign currency that are measured in terms of
historical cost are translated using the exchange rate at the date of the transaction.
Foreign currency differences arising from retranslation are recognised in the promt or loss, except for differences
arising from the retranslation of monetary items that in substance form part of the Group’s net investment in
a foreign operation, available-for-sale equity instruments and mnancial liabilities designated as hedges of
net investment in a foreign operation (note 2.8) or qualifying cash now hedges to the extent such hedges
are effective, which are recognised in other comprehensive income.
Foreign operations
The assets and liabilities of foreign operations, excluding goodwill and fair value adjustments arising on
acquisitions, are translated to Singapore Dollars at exchange rates prevailing at the end of the reporting
period. The income and expenses of foreign operations are translated to Singapore Dollars at exchange rates
prevailing at the dates of the transactions. Goodwill and fair value adjustments arising from the acquisition of
a foreign operation are treated as assets and liabilities of the foreign operation and translated at the exchange
rates at the end of the reporting period.
Foreign currency differences are recognised in other comprehensive income, and presented in the foreign
currency translation reserve (translation reserve) in equity. However, if the foreign operation is not a
wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to
the non-controlling interests. When a foreign operation is disposed off such that control, signimcant innuence
or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is
transferred to the promt or loss as part of the gain or loss on disposal. When the Group disposes off only part
of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion
of the cumulative amount is reattributed to non-controlling interests. When the Group disposes off only part
of its investment in an associate or joint venture that includes a foreign operation while retaining signimcant
innuence or joint control, the relevant proportion of the cumulative amount is transferred to the promt or loss.
Net investment in a foreign operation
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned
nor likely to occur in the foreseeable future, foreign exchange gains and losses arising from such a monetary
item are considered to form part of a net investment in a foreign operation. These are recognised in other
comprehensive income and are presented in the translation reserve in equity.
