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