Annual Report 2011/12 - International Entertainment Corporation

Notes to the Consolidated Financial StatementsFor the year ended 31 March 20123. SIGNIFICANT ACCOUNTING POLICIES (Continued)Foreign currencies (Continued)Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, arerecognised in profit or loss in the period in which they arise.For the purposes of presenting the consolidated financial statements, the assets and liabilities of the Group’s foreignoperations are translated into the presentation currency of the Group (i.e. Hong Kong dollars) using exchange ratesprevailing at the end of the reporting period. Income and expenses items are translated at the average exchangerates for the year, unless exchange rates fluctuate significantly during the period, in which case, the exchange ratesprevailing at the transactions are used. Exchange differences arising, if any, are recognised in other comprehensiveincome and accumulated in equity (the exchange reserve).On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposalinvolving loss of control over a subsidiary that includes a foreign operation, a disposal involving loss of joint control overa jointly controlled entity that includes a foreign operation, or a disposal involving loss of significant influence over anassociate that includes a foreign operation), all of the exchange differences accumulated in equity in respect of thatoperation attributable to the owners of the Company are reclassified to profit or loss.Retirement benefits costsPayments to retirement benefits schemes which are defined contribution plans are charged as an expense when theemployees have rendered service entitling them to the contribution.ProvisionsProvisions are recognised when the Group has a present obligation as a result of a past event, and it is probable thatthe Group will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.Provisions are measured at the best estimate of the consideration required to settle the present obligation at the endof the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provisionis measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value ofthose cash flows (where the effect of time value of money is material).International Entertainment Corporation - Annual Report 2011/12 47