TPSEAL 2010 Financial Results. - Serena Hotels

Notes to the Financial Statements (continued)
2 Summary of significant accounting policies (continued)
(c)
Functional currency and translation of foreign currencies (continued)
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the income
statement within ‘finance income or cost’. All other foreign exchange gains and losses are presented in the income statement
within ‘other income’ or ‘other expenses’.
Translation differences related to changes in amortised cost are recognised in profit or loss, and other changes in carrying
amount are recognised in other comprehensive income.
Translation differences on non-monetary financial assets and liabilities, such as equities held at fair value through profit or loss,
are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets,
such as equities classified as available-for-sale financial assets, are included in other comprehensive income.
(iii) Group companies
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:
(i)
(ii)
(iii)
assets and liabilities for each statement of financial position presented are translated at the closing rate at the end of
the reporting period;
income and expenses for each income statement amount are translated at average exchange rates (unless this
average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in
which case income and expenses are translated at the dates of the transactions); and
all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken to
other comprehensive income. When a foreign operation is partially disposed of or sold, exchange differences that are recorded
in equity are recognised in the income statement as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate.
(d)
(e)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decisionmaker
(CODM). The CODM who is responsible for allocating resources and assessing performance of the operating segments
has been identified as the Managing Director who makes strategic decisions.
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary
course of the Group’s activities. Revenue is shown net of value-added tax (VAT), returns, rebates and discounts and after
eliminating sales within the Group.
The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic
benefits will flow to the Group and when specific criteria have been met for each of the Group’s activities as described below.
The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and
the specifics of each arrangement.
TPS EASTERN AFRICA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS 2010 49