Page 152 - index

150

NOTES TO THE
FINANCIAL STATEMENTS

YEAR ENDED 31 DECEMBER 2015

2.2 Consolidation (continued)
Subsidiaries (continued)

Assets and liabilities of foreign subsidiaries are translated into Singapore dollars at exchange rates approximate to those ruling
at the reporting date. Income, expenses and cash flows are translated at average rates prevailing during the period. Translation
differences are recognised in other comprehensive income, and are presented within equity in the foreign currency translation
reserve. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation
difference is allocated to the non-controlling interests. When a foreign subsidiary is disposed of such that control is lost, the
cumulative amount in the foreign currency translation reserve related to that foreign subsidiary is transferred to the income
statement as an adjustment to the profit or loss arising 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.

All significant intra-group transactions, balances and unrealised gains/losses are eliminated on consolidation. Unrealised gains
are eliminated in full. Unrealised losses are eliminated in the same way as unrealised gains but only to the extent that there is no
evidence of impairment. Otherwise they are recognised immediately in the income statement.

Associates
Associate is that entity which the Group has significant influence, but not control, over the financial and operating policies.

Significant influence is presumed to exist when the Group holds 20% or more of the voting power of another entity.

Investment in associate is accounted for using the equity method. It is recognised initially at cost, which includes transaction
costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and
other comprehensive income of equity-accounted investee, after adjustments to align the accounting policies with those of the
Group, from the date that significant influence commences until the date that significant influence ceases.

When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of the investment,
together with any long-term interests that form part thereof is reduced to zero, and the recognition of further losses is
discontinued except to the extent that the Group has an obligation to fund the investee’s operations or has made payments
on behalf of the investee.

2.3 Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The costs of self-constructed assets
include the cost of materials and direct labour, an appropriate proportion of overheads, the costs of dismantling and removing
the assets and restoring the site on which they are located and capitalised borrowing costs.

Subsequent expenditure relating to existing property, plant and equipment is added to the carrying amount of the asset when
it is probable that future economic benefits, in excess of the 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 year in which it is incurred.

Gains or losses arising from the retirement or disposal of property, plant and equipment are determined as the difference
between the estimated net disposal proceeds and the carrying amount of the asset and are recognised in the income
statement on the date of retirement or disposal.