Notes to the financial statements for the year ended 31 December 2015
3. Significant accounting policies continued
33
ii Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of transactions. Foreign currency assets and liabilities are translated into the functional currency using the exchange rate prevailing at the statement of
financial position date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognized in the statement of profit or loss and other comprehensive income as part of the
‘Net gainslosses on financial assets and liabilities at fair value through profit or loss’. Exchange differences on other financial instruments are included in profit or loss in the statement of profit or loss and other comprehensive income as
‘Net foreign exc
hange
gainslosses’. Foreign exchange differences relating to cash and cash equivalents are included in profit or loss in the statement of profit or loss and other
comprehensive income as Net foreign exchange gainslosses.
c Petroleum Fund Gross Receipts
The Petroleum Fund Law requires certain parties to deposit taxes and other petroleum-related payments payable to the Government of Timor-Leste directly into the Petroleum Fund. The Petroleum Fund recognizes these and other transactions as follows:
Payments made as Petroleum Fund receipts in accordance with Article 6.1a are recognized as increases in the statement of changes in capital of the Petroleum Fund.
Payments made by the Designated Authority in accordance with Article 6.1b are recognized as increases in the statement of changes in capital of the Petroleum Fund.
Income earned by the Petroleum Fund from the investment of its assets is recognized in the statement of profit or loss and other comprehensive income in accordance with Article 6.1c.
Payments received by Timor-Leste relating directly to Petroleum Fund resources not covered in Article 6.1 a to d of the Petroleum Fund law are recognized as increases in the statement of changes in capital of the Petroleum Fund in accordance with Article 6.1e.
Management fees paid from the gross receipts of the Petroleum Fund pursuant to Article 6.2 are recognized in the statement of profit or loss and other comprehensive income.
Refunds of taxation made pursuant to Article 10 are recognized as reductions in the statement of changes in capital of the Petroleum Fund.
d Transfers to the Consolidated Fund
The National Government of República Democrática de Timor- Leste “The Consolidated Fund” comprises:
• Central government ministries; and
• Autonomous agencies under significant control of Ministry of Finance.
Transfers to the Consolidated Fund are appropriations approved by National Parliament of Timor-Leste. All transfers to the Consolidated Fund are authorized and recognized when paid to the Consolidated Fund.
e Interest income
Interest income is accrued on a time basis, by reference to the principal outstanding and at the interest rate applicable. It is recognized in the statement of profit or loss and other comprehensive income and shown separately from other fair value movements.
f Unit trust Income
Unit trust distribution income is recognized when the Fund’s right to receive income is established. Unit trust income is presented gross of any non-recoverable withholding taxes, which are disclosed separately in the statement of profit or loss and other comprehensive income.
g Dividend income
Dividend income from investments is recognised when the shareholders right to receive payment has been established. Dividend income is presented gross of any non-recoverable withholding taxes, which are disclosed separately in the statement of profit or loss and other
comprehensive income.
h Net gain or loss on financial assets and liabilities at fair value through profit and loss
This item includes cha nges in the fair value of financial assets and liabilities held for trading or designated upon initial recognition as ‘at fair
value through profit or loss’ and excludes interest and dividend income and expenses.
Notes to the financial statements for the year ended 31 December 2015
3. Significant accounting policies continued
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