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90
WCT Berhad (66538-K)
annual report 2011
NOTES TO THE FINANCIAL STATEMENTS
31 December 2011
cont’d
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES cont’d
2.6 Foreign currency cont’d
(b) Foreign currency transactions cont’d
Exchange differences arising on the settlement of monetary items or on translating monetary items at the
reporting date are recognised in profit or loss except for exchange differences arising on monetary items
that form part of the Group’s net investment in foreign operations, which are recognised initially in other
comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign
currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the
foreign operation.
Exchange differences arising on the translation of non-monetary items carried at fair value are included in
profit or loss for the period except for the differences arising on the translation of non-monetary items in
respect of which gains and losses are recognised directly in equity. Exchange differences arising from such
non-monetary items are also recognised directly in equity.
(c) Foreign operations
The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the
reporting date and income and expenses are translated at exchange rates at the dates of the transactions.
The exchange differences arising on the translation are taken directly to other comprehensive income.
On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income
and accumulated in equity under foreign currency translation reserve relating to that particular foreign
operation is recognised in the profit or loss.
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets
and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations
and translated at the closing rate at the reporting date.
2.7 Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and
equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the
item will flow to the Group and the cost of the item can be measured reliably.
Subsequent to recognition, plant and equipment and furniture and fixtures are measured at cost less accumulated
depreciation and accumulated impairment losses. When significant parts of property, plant and equipment are
required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful
lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the
carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other
repair and maintenance costs are recognised in profit or loss as incurred. Freehold buildings are measured at
fair value less accumulated depreciation on buildings and impairment losses recognised after the date of the
revaluation. Valuations are performed with sufficient regularity to ensure that the carrying amount does not
differ materially from the fair value of the freehold land and buildings at the reporting date.