Financial Report 2008 - Leighton Holdings

Notes to the Financial Statements continuedfor the year ended 30 June 20081. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUEDForeign currency translationFunctional and presentation currencyThe consolidated financialstatements are presented inAustralian dollars, which is LeightonHoldings Limited’s functional andpresentation currency.TransactionsForeign currency transactions aretranslated into the functionalcurrency using the exchange ratesprevailing at the dates of thetransaction. Foreign exchange gainsand losses resulting from thesettlement of such transactions andfrom the translation at period-endexchange rates of monetary assetsand liabilities denominated in foreigncurrencies are recognised in theincome statement. Non-monetaryitems that are measured in terms ofhistorical cost in a foreign currencyare translated using the exchangerate as at the date of the initialtransaction.Non-monetary items measured at fairvalue in a foreign currency aretranslated using the exchange ratesat the date when the fair value wasdetermined.Translation of controlled foreignentitiesAssets and liabilities of controlledforeign entities are translated into thepresentation currency at the rates ofexchange at reporting date and theincome statement is translated at therates approximating foreignexchange rates ruling at the dates ofthe transactions. The resultingexchange differences are takendirectly to the foreign currencytranslation reserve. Exchange gainsand losses on transactions whichform part of the net investments inforeign controlled entities togetherwith any related income tax effect arerecognised in the foreign currencytranslation reserve on consolidation.On disposal of a foreign entity, thedeferred cumulative amountrecognised in equity relating to thatparticular foreign entity is recognisedin the income statement as part ofthe gain or loss on sale.Earnings per shareBasic earnings per shareBasic earnings per share isdetermined by dividing profitattributable to members of the parententity, excluding any costs ofservicing equity other than ordinaryshares, by the weighted averagenumber of ordinary sharesoutstanding during the period,adjusted for bonus elements inordinary shares issued during theperiod.Diluted earnings per shareDiluted earnings per share adjuststhe figures used in the determinationof basic earnings per share to takeinto account the after income taxeffect of interest and other financingcosts associated with dilutivepotential ordinary shares and theweighted average number of sharesassumed to have been issued for noconsideration in relation to dilutivepotential ordinary shares.Leighton Holdings Limited Financial Report 2008 NOTES TO THE FINANCIAL STATEMENTS 10