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NOTES TO THE FINANCIAL STATEMENTS
These notes form an integral part of and should be read in conjunction with the accompanying financial statements.
1 GENERAL
The financial statements are expressed in Singapore dollars. The Development Bank of Singapore Ltd “DBS Bank” is principally engaged in the business of banking including the
operations of an Asian Currency Unit under terms and conditions specified by the Monetary Authority of Singapore. The principal activities of the subsidiary companies of DBS Bank are
disclosed in Note 29.2.
DBS Bank is a wholly owned subsidiary of DBS Group Holdings Ltd “DBSH”. The registered office of DBS Bank is located at 6 Shenton Way, DBS Building Tower One,
Singapore 068809.
Pursuant to Section 2013B of the Singapore Companies Act, DBS Bank is not required to prepare consolidated financial statements. The results of DBS Bank’s subsidiary companies,
and newly acquired and incorporated subsidiary companies have been included in the consolidated financial statements of DBSH Group from the date they became subsidiary
companies
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies applied by DBS Bank and its subsidiary companies “DBS Group” and, except where noted, are consistent with those applied
in the previous financial year. The principal accounting policies adopted in the preparation of these financial statements are set out below:
2.1 BASIS OF PRESENTATION
These financial statements of DBS Bank are prepared in accordance with the historical cost convention, modified by the revaluation of certain treasury instruments to market value. They
are prepared and complied in accordance with Singapore Companies Act and Singapore Statements of Accounting Standard “SAS”.
In 2002, DBS Bank has adopted the following SASs: SAS 12 Revised 2001
Income Taxes SAS 30 2001
Interim Financial Reporting
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2.2 SUBSIDIARY COMPANIES
Subsidiary companies are companies in which DBS Bank has interest of over 50 in the issued share capital at balance sheet date.
Investments in subsidiary companies are stated in the financial statements at cost less provision for dimunition in value, except where such diminution is temporary.
2.3 ASSOCIATED AND JOINT VENTURE COMPANIES
Associated companies are companies in which DBS Bank has a long-term equity interest of between 20 and 50 and over whose financial decisions and operating policies DBS Bank
exercises significant influence. A joint venture is a contractual arrangement whereby DBS Bank and its joint venture partners undertake an economic activity, which is subject to control, and
none of the parties involved unilaterally have control over the economic activity.
Investments in associated and joint venture companies are stated in the financial statements at cost less provision for dimunition in value, except where such diminution is temporary.
2.4 GOODWILL
Goodwill may arise on the acquisition of subsidiary companies or business undertakings. It represents the excess of the cost of an acquisition over the fair value of the share of the
identifiable net assets of the acquired subsidiary companies or business undertakings at the date of acquisition. Goodwill on acquisitions of subsidiary companies or business undertakings
occurring on or after January 1, 2001 is reported in the balance sheet as an intangible asset and is amortised using a straight-line method over its estimated useful life, subject to a maximum of 20
years. Goodwill on acquisitions of subsidiary companies or business undertakings that occurred prior to January 1, 2001 was charged in full to reserves in shareholders’ equity; such goodwill
has not been retroactively capitalised and amortised.
On the acquisition of a foreign subsidiary company, goodwill arising is determined initially in the applicable foreign currency and will be translated into Singapore dollars at the exchange rate
prevailing at the date of acquisition. The goodwill in Singapore dollars determined at the date of acquisition is the carrying value, which will be subsequently amortised.
The carrying value of goodwill is reviewed periodically or when circumstances or events indicate that there may be uncertainty over the carrying amount. Goodwill will be written down
for impairment when the net present value of the forecast future cash flows of the business are insufficient to support the carrying value.
The gain or loss on disposal of an entity includes the related unamortised balances of goodwill relating to the entity disposed of or, pre-January 1 2001 acquisitions, any goodwill previously
charged to shareholders’ equity.
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2.5 FOREIGN CURRENCIES
