Annual Report 2012, PDF - Axiata Group Berhad - Investor Relations

Axiata Group Berhad (242188-H) Annual Report 20123. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(x) Foreign currencies (continued)(ii) Transactions and balancesForeign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchangegains and losses resulting from the settlement of such transactions and from the translation at year-endexchange rates of monetary assets and liabilities (inclusive of advances to subsidiaries treated as quasiinvestments)denominated in foreign currencies are recognised in the net profit for the financial year,except when deferred in other comprehensive income as qualifying cash flow hedges and qualifyingnet investment hedges.Foreign exchange gains and losses that relate to borrowings are presented in the profit or loss within‘finance income or cost’. All other foreign exchange gains and losses are presented in profit or losswithin ‘foreign exchange gains/(losses).Changes in the fair value of monetary securities denominated in foreign currency classified as AFS areanalysed between translation differences resulting from changes in the amortised cost of the securityand other changes in the carrying amount of the security. Translation differences related to changes inamortised cost are recognised in the profit or loss for the financial year, and other changes in carryingamount are recognised in other comprehensive income.(iii) Group companies (Consolidated financial statements)The results and financial position of all the Group entities (none of which has the currency of ahyperinflationary economy) that have a functional currency different from the presentation currencyare translated into the presentation currency as follows:• assets and liabilities for each statement of financial position presented are translated at the closingrate at the date of that statements of financial position;• income and expenses for each statements of comprehensive income are translated at averageexchange rates (unless this average is not a reasonable approximation of the cumulative effect ofthe rates prevailing on the transaction dates, in which case income and expenses are translated atthe rate on the dates of the transactions); and• all resulting exchange differences are recognised as a separate component of other comprehensiveincome.Goodwill and fair value adjustments arising on the acquisitions of a foreign entity are treated as assetsand liabilities of the foreign entity and translated at the closing rate. Exchange differences arising arerecognised in other comprehensive income.On consolidation, exchange differences arising from the translation of the net investment in foreignoperations are taken to other comprehensive income. When a foreign operation is partially disposed ofor sold, exchange differences that were recorded in equity are recognised in the profit or loss as partof the gain or loss on sale.199