cont'd - KNM Steel Sdn Bhd

KNM GROUP BERHAD I Annual Report 201259Notes to the Financial Statements (cont’d)2. Significant accounting policies (Cont’d)(a)Basis of consolidation (cont’d)(viii) Transactions eliminated on consolidationIntra-group balances and transactions, and any unrealised income and expenses arising fromintra-group transactions, are eliminated in preparing the consolidated financial statements.Unrealised gains arising from transactions with associates are eliminated against the investmentto the extent of the Group’s interest in the associates. Unrealised losses are eliminated in thesame way as unrealised gains, but only to the extent that there is no evidence of impairment.(b)Foreign currency(i)Foreign currency transactionsTransactions in foreign currencies are translated to the respective functional currencies of Groupentities at exchange rates at the date of the transaction.Monetary assets and liabilities denominated in foreign currencies at the end of the reporting periodare retranslated to the respective functional currencies of Group entities at the exchange rate atthat date.Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at theend of the reporting date except for those that are measured at fair value are retranslated to thefunctional currency at the exchange rate at the date that the fair value was determined.Foreign currency differences arising on retranslation are recognised in profit or loss, except fordifferences arising on the retranslation of available-for-sale equity instruments or a financialinstrument designated as a hedge of currency risk, which are recognised in other comprehensiveincome.(ii)Operations denominated in functional currencies other than Ringgit Malaysia (RM)The assets and liabilities of operations in functional currencies other than RM, including goodwilland fair value adjustments arising on acquisition, are translated to RM at exchange rates at theend of the reporting period. The income and expenses of foreign operations are translated to RMat exchange rates at the dates of the transactions.Foreign currency differences are recognised in other comprehensive income and accumulatedin the foreign currency translation reserve (“FCTR”) in equity. However, if the operation is a nonwholly-ownedsubsidiary, then the relevant proportionate share of the translation difference isallocated to the non-controlling interests. When a foreign operation is disposed of such control,significant influence or joint control is lost, the cumulative amount in the FCTR related to thatforeign operation is reclassified to profit or loss as part of the profit or loss on disposal.When the Group disposes of only part of its interest in a subsidiary that includes a foreign operationwhile retaining control, the relevant proportion of the cumulative amount is reattributed to noncontrollinginterests. When the Group disposes of only part of its investment in an associate orjoint venture that includes a foreign operation while retaining significant influence or joint control,the relevant proportion of the cumulative amount is reclassified to profit or loss.In the consolidated financial statements, when settlement of a monetary item receivable fromor payable to a foreign operation is neither planned nor likely in the foreseeable future, foreignexchange gains and losses arising from such a monetary item are considered to form part of anet investment in a foreign operation and are recognised in other comprehensive income, and arepresented in the FCTR within equity.