Strength & Stability - ECS Holdings Limited

2 Summary of Significant Accounting Policies (Cont’D)
2.2 Consolidation (Cont’d)
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions, are eliminated in
preparing the consolidated financial statements. Unrealised gains arising from transactions with associates are eliminated against the
investment to the extent of the Group’s interest in the associate. Unrealised losses are eliminated in the same way as unrealised gains,
but only to the extent that there is no evidence of impairment.
Accounting for subsidiaries and associates by the Company
Investments in subsidiaries and associates are stated in the Company’s balance sheet at cost less accumulated impairment losses.
2.3 Foreign Currencies
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the exchange rate at the
date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the
functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies
that are measured at fair value are retranslated to the functional currency at the exchange rate at the date on which the fair value was
determined.
Foreign currency differences arising on retranslation are recognised in the income statement, except for differences arising on the
retranslation of monetary items that in substance form part of the Group’s net investment in a foreign operation (see below) and
available-for-sale equity instruments.
Foreign operations
The assets and liabilities of foreign operations are translated to Singapore dollars at exchange rates prevailing at the reporting date.
The income and expenses of foreign operations are translated to Singapore dollars at exchange rates prevailing at the dates of the
transactions. Goodwill and fair value adjustments arising on the acquisition of a foreign operation on or after 1 January 2006 are
treated as assets and liabilities of the foreign operation and translated at the closing rate. For acquisitions prior to 1 January 2006, the
exchange rates at the date of acquisition were used.
Foreign currency differences are recognised in the foreign currency translation reserve. When a foreign operation is disposed of, in
part or in full, the relevant amount in the foreign exchange translation reserve is transferred to the income statement.
Net investment in foreign subsidiaries and associates
Exchange differences arising from monetary items that in substance form part of the Company’s net investment in foreign operations
are recognised in the Company’s income statement. Such exchange differences are reclassified to equity in the consolidated financial
statements. When the foreign operation is disposed of, the cumulative amount in equity is transferred to the income statement.
p.
54
Notes to the
Financial Statements
These notes form an integral part of the financial statements.
ECS Holdings Limited