FRS 109: Financial Instruments FRS 109 replaces the existing guidance in FRS 39 Financial
Instruments: Recognition and Measurement. It includes revised guidance on the classification and measurement of financial
instruments and introduces a new expected credit loss model for impairment of financial assets as well as new requirements for
general hedge accounting. The standard is effective for annual reporting periods beginning on or after 1 January 2018. Early
adoption is permitted.
A summary of the most significant group accounting policies is described further below starting with those relating to the entire
financial statements followed by those relating to the income statement, the balance sheet and other specific topics. This does
not reflect the relative importance of these policies to the Group.
A GENERAL ACCOUNTING POLICIES
2.4 Group Accounting
SUBSIDIARIES Subsidiaries are entities including structured entities over which
the Group has control. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity.
Subsidiaries are consolidated from the date control is transferred to the Group to the date control ceases.
The acquisition method is used to account for business combinations. Refer to Note 2.12 for the Group’s accounting policy on goodwill.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
JOINT VENTURES Joint ventures are arrangements over which the Group has joint
control. The Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.
Investment in joint ventures are accounted for using the equity method.
ASSOCIATES Associates are entities over which the Group has significant
influence, but no control where the Group generally holds a shareholding of between and including 20 and 50 of the
voting rights. Investments in associates are accounted for using the equity method.
2.5 Foreign currency treatment
FUNCTIONAL AND PRESENTATION CURRENCY Items in the financial statements are measured using the functional
currency of each entity in the Group, this being the currency of the primary economic environment in which the entity operates. The
Group’s financial statements are presented in Singapore dollars, which is the functional currency of the Company.
FOREIGN CURRENCY TRANSACTIONS AND BALANCES Transactions in foreign currencies are measured using the exchange
rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency of the entity
undertaking the transaction at the exchange rates as at the balance sheet date. Foreign exchange differences arising from this
translation are recognised in the income statement.
Non-monetary assets and liabilities measured at cost in a foreign currency are translated using the exchange rates at the date of the
transaction.
Non-monetary assets and liabilities measured at fair values in foreign currencies are translated using the exchange rates at the
date when the fair values are determined, which is generally the balance sheet date.
Unrealised foreign exchange differences arising from non- monetary financial assets and liabilities classified as fair value
through profit or loss are recognised in the income statement as trading income. For non-monetary financial assets such as equity
investments classified as available-for-sale, unrealised foreign exchange differences are recorded in other comprehensive income
and accumulated in equity until the assets are disposed of or become impaired, upon which they are reclassified to the income
statement.
SUBSIDIARIES AND BRANCHES The results and financial position of subsidiaries and branches
whose functional currency is not Singapore dollars “foreign operations” are translated into Singapore dollars in the following
manner:
• Assetsandliabilitiesaretranslatedattheexchangeratesasat the balance sheet date;
• Incomeandexpensesintheincomestatementaretranslatedat exchange rates prevailing at each month-end, approximating
the exchange rates at the dates of the transactions; and • Allresultingexchangedifferencesarerecognisedinother
comprehensive income and accumulated under capital reserves in equity. When a foreign operation is disposed of, exchange
differences are recognised in the income statement as part of the gain or loss on disposal.
For acquisitions prior to 1 January 2005, the foreign exchange rates at the respective dates of acquisition were used. Please refer to
Note 27 for an overview of goodwill recorded. Goodwill and fair value adjustments arising on the acquisition of a foreign operation
on or after 1 January 2005 are treated as assets and liabilities of the foreign operation and translated at the closing rate.
2.6 Segment reporting
