NOTES TO THE
FINANCIAL STATEMENTS
Year ended 31 December 2014
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.2 Foreign currency (cont’d)
Foreign operations
The assets and liabilities of foreign operations are translated to Singapore dollars at exchange rates at the reporting
date. The income and expenses of foreign operations are translated to Singapore dollars at exchange rates at the
dates of the transactions. Goodwill and fair value adjustments arising on the acquisition of a foreign operation
are treated as assets and liabilities of the foreign operation and translated at the exchange rate at the end of the
reporting period.
Foreign currency differences are recognised in the foreign currency translation reserve in equity. When a foreign
operation is disposed of such that control is lost, the cumulative amount in the foreign currency translation reserve
related to that foreign operation is transferred to the Statement of Total Return as part of the gain or loss on
disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation
while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests.
Hedge of net investment in foreign operations
The Group applies hedge accounting to foreign currency differences arising between the functional currency of
the foreign operations and the parent entity’s functional currency (Singapore dollars), regardless of whether the net
investment is held directly or through an intermediate parent.
Foreign currency differences arising on the retranslation of a financial liability designated as a hedge of a net
investment in a foreign operation are recognised in the foreign currency translation reserve. To the extent that the
hedge is ineffective, such differences are recognised in the Statement of Total Return. When the hedged part of a
net investment is disposed of, the relevant amount in the foreign currency translation reserve is transferred to the
Statement of Total Return as part of the profit or loss on disposal.
3.3 Investment properties
Investment properties are properties held either to earn rental income or for capital appreciation or for both, but not
for sale in the ordinary course of business. Investment properties are accounted for as non-current assets and are
stated at cost on acquisition, and at valuation thereafter. The cost of a purchased property comprises its purchase
price and any directly attributable expenditure. Valuations are determined in accordance with the Trust Deed,
which requires the investment properties to be valued by independent registered valuers in the following manner:
(i)
in such manner and frequency required under the CIS code issued by MAS; and
(ii)
at least once a year, on the 31st December of each year.
Any increase or decrease on revaluation is credited or charged directly to the Statement of Total Return as a net
change in fair value of investment properties.
Subsequent expenditure relating to investment properties that has already been recognised is added to the carrying
amount of the asset when it is probable that future economic benefits, in excess of originally assessed standard
of performance of the existing asset, will flow to the Group. All other subsequent expenditure is recognised as an
expense in the period in which it is incurred.
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