Foreign operations The results and financial position of the Group’s operations
whose functional currency is not Singapore dollars are translated into Singapore dollars in the following manner:
• Assetsandliabilitiesaretranslatedattheexchangerate ruling at the balance sheet date;
• Incomeandexpensesintheincomestatementare translated at an average exchange rate approximating the
exchange rates at the dates of the transactions; and • Allresultingexchangedifferencesarerecognisedinother
comprehensive income. 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. For acquisitions prior to 1 January 2005, the foreign exchange rates at the dates of acquisition were used.
Consolidation adjustments On consolidation, foreign exchange differences arising from the
translation of net investments in foreign entities, as well as any borrowings and instruments designated as foreign currency
hedges of such investments, are recognised in other comprehensive income and accumulated under capital reserves
in equity. When a foreign operation is disposed of, such currency translation differences are recognised in the income
statement as part of the gain or loss on disposal.
2.4 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to management responsible for
allocating resources and assessing performance of the operating segments. Segment revenue, segment profits, segment assets
and segment liabilities are also measured on a basis that is consistent with internal reporting.
The Group’s financial businesses are organised into Consumer Private Banking, Institutional Banking, Treasury and Others. In
total, the Group has four reportable segments.
2.5 Revenue recognition
Interest income and interest expense Interest income and interest expense are recognised on a
time-proportionate basis using the effective interest method. The effective interest rate is the rate that discounts estimated
future cash receipts or payments through the expected life of the financial instrument or, where appropriate, a shorter period
to its carrying amount. The calculation includes significant fees and transaction costs that are integral to the effective interest
rate, as well as premiums or discounts. No interest expense is accrued on the Group’s structured investment deposits which
are carried at fair value through profit or loss. When a receivable is impaired, the Group reduces the carrying
amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the
instrument. Interest earned on the recoverable amount is recognised as interest income in the income statement.
Fee and commission income The Group earns fee and commission income from a diverse
range of products and services provided to its customers. Fee and commission income is recognised on the completion of a
transaction. For a service that is provided over a period of time, fee and commission income is recognised over the period
during which the related service is provided or credit risk is undertaken.
Dividend income Dividend income is recognised when the right to receive
payment is established. Dividend income arising from held for trading financial assets is recognised in “Net trading income”,
while that arising from available-for-sale financial assets is recognised in “Net income from financial investments”.
Rental income Rental income from operating leases on properties is recognised
on a straight-line basis over the lease term.
2.6 Cash and cash equivalents
