notes to the financial statements - Investor Relations
notes to the financial statements - Investor Relations
notes to the financial statements - Investor Relations
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CWT Limited<br />
62<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
YEAR ENDED 31 DECEMBER 2011<br />
3 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)<br />
3.1 Basis of consolidation (cont’d)<br />
Transactions eliminated on consolidation<br />
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions are<br />
eliminated in preparing <strong>the</strong> consolidated <strong>financial</strong> <strong>statements</strong>. Unrealised gains arising from transactions with associates and<br />
jointly-controlled entities are eliminated <strong>to</strong> <strong>the</strong> extent of <strong>the</strong> Group’s interest in <strong>the</strong> entity. Significant unrealised losses are<br />
eliminated in <strong>the</strong> same way as unrealised gains, but only <strong>to</strong> <strong>the</strong> extent that <strong>the</strong>re is no evidence of impairment.<br />
Accounting for subsidiaries, associates and jointly-controlled entities by <strong>the</strong> Company<br />
Investments in subsidiaries, associates and jointly-controlled entities are stated in <strong>the</strong> Company’s statement of <strong>financial</strong><br />
position at cost less accumulated impairment losses.<br />
3.2 Foreign currency<br />
Foreign currency transactions<br />
Transactions in foreign currencies are translated <strong>to</strong> <strong>the</strong> respective functional currencies of Group entities at exchange rates<br />
at <strong>the</strong> dates of <strong>the</strong> transactions. The functional currencies of <strong>the</strong> Group entities are mainly <strong>the</strong> Singapore dollar, United<br />
States dollar, Euro and <strong>the</strong> Chinese Yuan. Monetary assets and liabilities denominated in foreign currencies at <strong>the</strong> end of<br />
<strong>the</strong> reporting period are retranslated <strong>to</strong> <strong>the</strong> functional currency at <strong>the</strong> exchange rate at that date. The foreign currency gain<br />
or loss on monetary items is <strong>the</strong> difference between amortised cost in <strong>the</strong> functional currency at <strong>the</strong> beginning of <strong>the</strong> year,<br />
adjusted for effective interest and payments during <strong>the</strong> year, and <strong>the</strong> amortised cost in foreign currency translated at <strong>the</strong><br />
exchange rate at end of <strong>the</strong> year.<br />
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated <strong>to</strong> <strong>the</strong><br />
functional currency at <strong>the</strong> exchange rate at <strong>the</strong> date that <strong>the</strong> fair value was determined. Non-monetary items in a foreign<br />
currency that are measured in terms of his<strong>to</strong>rical costs are translated using <strong>the</strong> exchange rate at <strong>the</strong> date of <strong>the</strong> transaction.<br />
Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on <strong>the</strong><br />
retranslation of monetary items that in substance form part of <strong>the</strong> Group’s net investment in a foreign operation (see below)<br />
and available-for-sale equity instruments.<br />
Foreign operations<br />
The assets and liabilities of foreign operations are translated <strong>to</strong> Singapore dollars at exchange rates at <strong>the</strong> end of <strong>the</strong> reporting<br />
period. The income and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are<br />
translated <strong>to</strong> Singapore dollars at exchange rates at <strong>the</strong> dates of <strong>the</strong> transactions. Goodwill and fair value adjustments are<br />
treated as assets and liabilities of <strong>the</strong> foreign operation and translated at <strong>the</strong> closing rate.<br />
Foreign currency differences are recognised in o<strong>the</strong>r comprehensive income, and presented in <strong>the</strong> foreign currency translation<br />
reserve (currency translation reserve) in equity. However, if <strong>the</strong> foreign operation is a non-wholly-owned subsidiary, <strong>the</strong>n<br />
<strong>the</strong> relevant proportionate share of <strong>the</strong> translation difference is allocated <strong>to</strong> <strong>the</strong> non-controlling interests. When a foreign<br />
operation is disposed of such that control, significant influence or joint control is lost, <strong>the</strong> cumulative amount in <strong>the</strong> currency<br />
translation reserve related <strong>to</strong> that foreign operation is reclassified <strong>to</strong> profit or loss as part of <strong>the</strong> gain or loss on disposal. When<br />
<strong>the</strong> Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, <strong>the</strong><br />
relevant proportion of <strong>the</strong> cumulative amount is reattributed <strong>to</strong> non-controlling interests. When <strong>the</strong> Group disposes of only<br />
part of its investment in an associate or jointly-controlled entity that includes a foreign operation while retaining significant<br />
influence or joint control, <strong>the</strong> relevant proportion of <strong>the</strong> cumulative amount is reclassified <strong>to</strong> profit or loss.