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1
PRINCIPAL ACCOUNTING POLICIES (continued)
Interest in associates (continued)
the investee. The Group’s share of
the total recognised gains and losses
of associates is incorporated in the
consolidated fi nancial statements,
from the date that signifi cant infl uence
commences until the date that
signifi cant infl uence ceases, using
the equity method of accounting. The
carrying amount of such interests is
reduced to recognise any impairment,
other than a temporary impairment, in
the value of individual investments.
Where a group enterprise transacts
with an associate company,
unrealised gains and losses are
eliminated to the extent of the group’s
interest in the relevant associate
company, except where unrealised
losses provide evidence of an
impairment of the asset transferred.
When the Group’s share of losses
exceeds its interest in an investee,
the carrying amount of that interest
(including any long-term investments)
is reduced to nil and the recognition
of further losses is discontinued except
to the extent that the Group has an
obligation or has made payments on
behalf of the investee.
Any excess of net assets of an
associate over the cost of an
acquisition is treated in terms of
the Group’s accounting policy on
goodwill.
Investments in associates are
measured at cost less accumulated
impairment losses in the CSIR’s Annual
Financial Statements.
Interest in joint ventures
A joint venture is a contractual
arrangement whereby the CSIR and
other parties undertake economic
activity, which is subject to joint
control.
The Group’s share of the total
recognised gains and losses of jointlycontrolled
entities is incorporated in
the consolidated fi nancial statements,
from the date that joint control
commences until the date that joint
control ceases, using the equity
method of accounting. The carrying
amount of such interests is reduced to
recognise any impairment, other than
a temporary impairment, in the value
of individual investments.
Where a group enterprise transacts
with a joint venture, unrealised gains
and losses are eliminated to the
extent of the group’s interest in the
relevant joint venture, except where
unrealised losses provide evidence of
an impairment of the asset transferred.
When the Group’s share of losses
exceeds its interest in an investee,
the carrying amount of that interest
(including any long-term investments)
is reduced to nil and the recognition
of further losses is discontinued except
to the extent that the Group has an
obligation or has made payments on
behalf of the investee.
Any excess of net assets of a joint
venture over the cost of an acquisition
is treated in terms of the Group’s
accounting policy on goodwill.
Investments in joint ventures are
measured at cost less accumulated
impairment losses in the CSIR’s Annual
Financial Statements.
Foreign currencies
Foreign operations
All foreign subsidiaries of the CSIR are
foreign operations.
The fi nancial statements of foreign
subsidiaries are translated into South
African rand as follows:
• Assets and liabilities, including
goodwill and fair value
adjustments on consolidation,
at rates of exchange ruling at
the reporting entities’ fi nancial
year-end;
• Revenue, expenditure and cash
fl ow items at the average rates of
exchange during the relevant
fi nancial year (the average rates
approximate fair value).
Differences arising on translation are
refl ected as non-distributable reserves
called a foreign currency translation
reserve (FCTR). When a foreign
operation is disposed of, in part or in
full, the relevant amount in the FCTR is
transferred to profi t or loss.
129 ANNUAL FINANCIAL STATEMENTS