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43 Annual Report 2012
Notes to the Financial Statements
30 September 2012
2 Signifcant Accounting Policies (cont’d)
(a) Basis of Preparation (cont’d)
Improvements to FRS 2012 (cont’d)
Amendments to FRS 32 Financial Instruments: Presentation
The amendment clarifes the treatment of income tax relating to distributions and transaction costs. Income
tax related to distributions is recognised in the income statement, and income tax related to the costs of
equity transactions is recognised in equity. The improvements to FRS 32 are effective for annual periods
beginning on or after 1 October 2013.
(b) Currency Translation
Functional and Presentation Currency
Items included in the fnancial statements of each entity in the Group are measured using the currency of
the primary economic environment in which the entity operates (the “functional currency”). Management
has determined the functional currency of the Company and the Group to be Singapore dollar (“S$”),
as it best refects the economic substance of the underlying events and circumstances relevant to the
entities. Sales prices and major costs of providing goods and services including major operating expenses
are primarily infuenced by fuctuations in S$. The consolidated fnancial statements are presented in S$.
Transactions and Balances
Transactions in a currency other than the functional currency (“foreign currency”) are translated into the
functional currency using the exchange rates prevailing at the dates of the transactions. Currency translation
gains and losses resulting from the settlement of such transactions and from the translation at year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in proft
or loss, except for currency translation differences on net investment in foreign entities and borrowings and
other currency instruments qualifying as net investment hedges for foreign operations, which are included
in the currency translation reserve within equity in the consolidated fnancial statements.
Non-monetary items that are measured in terms of historical cost in foreign currencies are translated using
the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in
foreign currencies are translated using the exchange rates at the date when the fair value was determined.
Currency translation differences on non-monetary items, whereby the gains or losses are recognised in
proft or loss, such as equity investments held at fair value through proft or loss, are reported as part of the
fair value gain or loss. Currency translation differences on non-monetary items whereby the gains or losses
are recognised directly in equity are included in the fair value reserve.
Translation of Group Entities’ Financial Statements
The results and fnancial positionof all theGroupentities (noneof whichhas thecurrency of ahyperinfationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
- Assets and liabilities for the balance sheet presented are translated at the closing rate at the reporting
date;
- Income and expenses are translated at an average exchange rate (unless the average is not a
reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates,
in which case income and expenses are translated using the exchange rates at the dates of the
transactions); and
- All resulting exchange differences are recognised in other comprehensive income and accumulated
in the currency translation reserves within the statement of changes in equity.