notes to the consolidated financial statements - Sacombank

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted for the preparation of these consolidated financial statements are set out below.
2.1 Basis of preparation of consolidated financial statements
The consolidated financial statements have been prepared using the historical cost convention and in accordance with
Vietnamese Accounting Standards, the Vietnamese Accounting System and regulations applicable to banks and other
credit institutions operating in SR Vietnam. Accordingly, the consolidated financial statements are not intended to present
the financial position and results of operations and cash flows in accordance with jurisdictions other than SR Vietnam.
The accounting principles and practices utilised in SR Vietnam may differ from those generally accepted in countries and
jurisdictions other than SR Vietnam.
2.2 Fiscal year
The Group’s fiscal year is from 1 January to 31 December.
2.3 Foreign currencies
The consolidated financial statements are measured in Vietnamese Dong and presented using millions of Vietnamese
Dong.
Transactions arising in foreign currencies are translated at rates ruling on the transaction dates. Monetary assets and
liabilities denominated in foreign currencies at each month end are translated at the rates of exchange ruling at the month
end date. Foreign exchange differences from monthly revaluation are recorded in the foreign currency difference reserve in
the consolidated balance sheet and transferred to the consolidated income statement at the end of the year.
2.4 Consolidation
(i) Subsidiaries
Subsidiaries are those companies over which the Group has the power to govern the financial and operating policies.
Subsidiaries are consolidated from the date on which control is transferred to the Group. They are de-consolidated from
the date on which control ceases.
The results of operations of a subsidiary are included in the consolidated financial statements as from the date of
acquisition, which is the date on which control of the acquired subsidiary is effectively transferred to the buyer. The results
of operations of a subsidiary disposed of are included in the consolidated income statement until the date of disposal which
is the date on which the parent ceases to have control of the subsidiary. The difference between the proceeds from the
disposal of the subsidiary and the carrying amount of its assets less liabilities as of the date of disposal is recognised in the
consolidated income statement as the profit or loss on the disposal of the subsidiary. Where there is a partial disposal of
an interest in a subsidiary and there is no loss of control, the profit or loss arising on the partial disposal is included in the
consolidated income statement for the year.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Bank. The cost of an
acquisition is measured as the fair value of the assets given, equities instruments issued and liabilities incurred or assumed
at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities
assumed in a business combination are measured initially at their fair value at the acquisition date, irrespective of the
extent of the minority interest
99 ANNUAL REPORT 2011
Form B 05/TCTD - HN