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2.1.3 FRS 102, “Share-based Payment” has been adopted by the CCDG during the financial year but the Standard will be effective from January 1, 2005. The Standard requires an expense
to be recognised where DBS Bank buys goods or services in exchange for shares or other equity instruments equity-settled transactions, or in exchange for other assets equivalent in value to a
given number of shares or other equity instruments cash-settled transactions. The main impact of FRS 102 on DBS Bank will be the expensing of such share-based incentives awarded to
employees and directors.
2.1.4 FRS 103, “Business Combinations” has been adopted by the CCDG during the financial year and it applies to business combinations for annual periods beginning on or after July 1,
2004. The effect of the adoption of FRS 103 is that upon acquisition of subsidiaries or business undertakings, DBSH Group will include items like intangible assets and contingent liabilities as
part of the identifiable assets and liabilities acquired, at their fair values as at the acquisition date.
2.2 SUBSIDIARY COMPANIES
Subsidiary companies are companies in which DBS Bank has an interest of more than 50 in the issued share capital at balance sheet date.
Investments in subsidiary companies are stated in the financial statements at cost less impairment losses.
2.3 ASSOCIATED AND JOINT VENTURE COMPANIES
Associated companies are companies in which DBS Bank has an 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 joint 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 impairment losses.
2.4 FOREIGN CURRENCIES
Assets and liabilities denominated in foreign currencies are translated into Singapore dollars using the closing exchange rates at balance sheet date. Income and expenses are translated using
exchange rates at the transaction date. All resulting changes are recognised in the profit and loss account.
The profit and loss account of foreign entities not reporting in Singapore dollars are translated at the average rates of exchange. Balance sheets are translated at closing rates. Exchange
differences arising from the retranslation of opening foreign currency net investments and the related cost of hedging as well as exchange differences arising from retranslation of the result
for the year from average rates to the year end rates are accounted for in reserves.
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2.5 CASH AND CASH EQUIVALENTS
Cash and cash equivalents are carried in the balance sheet at cost. For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand and deposits held at call with
the central banks.
2.6 LOANS AND ADVANCES
