FY 2011 Annual Report - Sheng Siong

Sheng Siong Annual Report 2011
Notes to the Financial Statements
4 Significant accounting policies (Continued)
4.1 Basis of consolidation (Continued)
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group
transactions, are eliminated in preparing the financial statements.
4.2 Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of the Group entities
at the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date.
The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional
currency at the beginning of the period, adjusted for effective interest and payments during the period, and the
amortised cost in foreign currency translated at the exchange rate at the end of the reporting period.
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.
Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences
arising on the retranslation of available-for-sale equity instruments which are recognised in other comprehensive
income. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction.
Foreign subsidiary
The assets and liabilities of a foreign operation are translated to Singapore dollars at exchange rates prevailing
at the reporting date. The income and expenses of a foreign operation are translated to Singapore dollars at
exchange rates prevailing at the dates of the transactions.
Foreign exchange differences are recognised in the other comprehensive income. When a foreign operation is
disposed off, in part or in full, the relevant amount in the foreign currency translation reserve is transferred to
profit or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a
foreign operation while retaining controls, the relevant proportion of the cumulative amount is reattributed to
non-controlling interests.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned
nor likely 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.
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