Full Version Guinness Anchor Berhad Annual Report 2009 - Gab

106 GUINNESS ANCHOR BERHAD (5350-X)
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2009
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(b) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the exchange rate at
that date. Non-monetary assets and liabilities denominated in foreign currencies are translated at exchange rates at the dates of the transactions except for
those that are measured at fair value, which are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.
Foreign currency differences arising on retranslation are recognised in the income statements.
(ii)
Operations denominated in functional currencies other than Ringgit Malaysia
The assets and liabilities of operations in functional currencies other than RM, are translated to RM at exchange rates at the balance sheet date. Exchange
differences arising on the retranslation at closing rates of the opening balance sheet of overseas subsidiaries are taken to reserves. The income and expenses
of operations in functional currencies other than RM, are translated to RM at exchange rates at the dates of the transactions.
Foreign currency differences are recognised in capital reserve. On disposal, accumulated translation differences in capital reseve are recognised in the
consolidated income statement as part of the gain or loss on sale.
(c)
Derivative financial instruments
The Group holds derivative financial instruments to hedge its foreign currency risk exposure.
Forward foreign exchange contracts used are accounted for on an equivalent basis as the underlying assets, liabilities or net positions. Any profit or loss arising is
recognised on the same basis as that arising from the related assets, liabilities or net positions.
(d)
Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are stated at cost/valuation less any accumulated depreciation and any impairment losses. The Group has availed itself
to the transitional provision when the MASB first adopted IAS 16, Property, Plant and Equipment in 1998. Certain freehold land and buildings were revalued in
1984 and no later valuation has been recorded for these property, plant and equipment.
Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to
working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of selfconstructed
assets also includes the cost of materials and direct labour. Purchased software that is integral to the functionality of the related equipment is
capitalised as part of that equipment.
When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of
property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of
property, plant and equipment and are recognised net within “other income” or “other expenses” respectively in the income statements.