Singapore Press Holdings annual report 2011 Singapore Press ...

Notes to the
Financial StatementS
August 31, 2011
100 Singapore Press Holdings annual report 2011
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(c)
Currency translation (Cont’d)
(iii)
Translation of Group entities’ financial statements
The results and financial position of all the Group entities (none of which has the currency of
a hyperinflationary economy) that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
• Assets and liabilities are translated at the closing exchange rates at the date of the
balance sheet;
• Income and expenses are translated at average exchange rates; and
• All resulting exchange differences are taken to other comprehensive income and
transferred to the income statement upon the disposal of the foreign operation as part
of the gain or loss on disposal.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity on or after
September 1, 2005 are treated as assets and liabilities of the foreign entity and translated at
the closing rates at the date of balance sheet. For acquisitions prior to September 1, 2005,
the exchange rates at the dates of acquisition are used.
(d)
Impairment of non-financial assets
(i)
Goodwill
Goodwill recognised separately as an intangible asset is tested annually for impairment, as
well as when there is any indication that the goodwill may be impaired. Goodwill included
in the carrying amount of an investment in an associate/jointly-controlled entity is tested for
impairment as part of the investment, rather than separately.
For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s
cash-generating-units (“CGU”) expected to benefit from synergies arising from the business
combination.
An impairment loss is recognised when the carrying amount of the CGU, including the
goodwill, exceeds the recoverable amount of the CGU. Recoverable amount of the CGU is
the higher of the CGU’s fair value less cost to sell and value-in-use.
The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill
allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the
carrying amount of each asset in the CGU.
An impairment loss on goodwill is recognised in the income statement and is not reversed in
a subsequent period.