notes to the
financial statements
31 December 2015
2.
Summary of significant accounting policies (cont’d)
Foreign currency transactions and balances
The functional currency of the Company is the Singapore dollar as it reflects the primary economic environment in
which the Company operates.
Transactions in foreign currencies are recorded in the functional currency at the exchange rates ruling at the dates of
the transactions. At the end of each reporting period, recorded monetary balances, balances measured at historical cost
and balances measured at fair value that are denominated in non-functional currencies are reported at the exchange
rates ruling at the end of the reporting period, initial transaction dates and fair value measurement dates respectively. All
realised and unrealised exchange adjustment gains and losses are dealt with in profit or loss, except when recognised in
other comprehensive income.
The presentation currency is the functional currency.
Translation of financial statements of other entities
Each entity in the Group determines its appropriate functional currency to reflect the primary economic environment in
which the entity operates in. In translating the financial statements of an investee for incorporation in the consolidated
financial statements in the presentation currency i.e. the Singapore dollar, the assets and liabilities denominated in other
currencies are translated at the exchange rates ruling at the end of the reporting period and the profit or loss items are
translated at average exchange rates for the reporting period. The resulting translation adjustments (if any) are recognised
in other comprehensive income and accumulated in a separate component of equity until the disposal of that investee.
The step-by-step method is used whereby the financial statements of the foreign operation are first translated into the
functional currency of any intermediate holding company/companies and then translated into the functional currency
of the Company.
Segment reporting
The Group discloses financial and descriptive information about its consolidated reportable segments. Reportable
segments are operating segments or aggregations of operating segments that meet specified criteria. Operating
segments are components about which separate financial information is available that is evaluated regularly by the
chief operating decision makers in deciding how to allocate resources and in assessing the performance. Generally,
financial information is reported on the same basis as is used internally for evaluating operating segment performance
and deciding how to allocate resources to operating segments.
Subsidiaries
A subsidiary is an entity that is controlled by the Group and the Group is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to affect those returns through its power over the investee. The
existence and effect of substantive potential voting rights that the Group has the practical ability to exercise (that is,
substantive rights) are considered when assessing whether the Group controls another entity.
In the Company’s separate financial statements, an investment in a subsidiary is accounted for at cost less any allowance
for impairment in value. Impairment loss recognised in profit or loss for a subsidiary is reversed only if there has been a
change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised.
The carrying value and the net book value of the investment in a subsidiary are not necessarily indicative of the amount
that would be realised in a current market exchange.
• e x p e r i e n c i n g
k i n g s m e n
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