NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2014
Financial Statements
100
COSCO Corporation (Singapore) Limited
2.
Significant accounting policies
(continued)
2.21 Employee compensation (continued)
(c)
Share-based compensation
(continued)
When the options are exercised, the proceeds received (net of transaction costs) are credited to
share capital account when new ordinary shares are issued.
2.22 Currency translation
(a)
Functional and presentation currency
Items included in the financial statements of each entity in the Group are measured using the
currency of the primary economic environment in which the entity operates (“functional currency”).
The financial statements are presented in Singapore Dollars, which is the functional currency of the
Company.
(b)
Transactions and balances
Transactions in a currency other than the functional currency (“foreign currency”) are translated
into the functional currency using the exchange rates at the dates of the transactions. Currency
translation differences resulting from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies at the closing rates at the balance
sheet date are recognised in profit or loss. However, in the consolidated financial statements,
currency translation differences arising from borrowings in foreign currencies and other currency
instruments designated and qualifying as net investment hedges and net investment in foreign
operations, are recognised in other comprehensive income and accumulated in the currency
translation reserve.
When a foreign operation is disposed of or any borrowings forming part of the net investment of
the foreign operation are repaid, a proportionate share of the accumulated translation differences is
reclassified to profit or loss, as part of the gain or loss on disposal.
Foreign exchange gains and losses that impact profit or loss are presented in profit or loss within
“other gains and losses”.
Non-monetary items measured at fair values in foreign currencies are translated using the exchange
rates at the date when the fair values are determined.
(c)
Translation of Group entities’ financial statements
The results and financial position of all the Group entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency
are translated into the presentation currency as follows:
(i)
assets and liabilities are translated at the closing exchange rates at the reporting date;
(ii)
income and expenses are translated at average exchange rates (unless the average is not a
reasonable approximation of the cumulative effect of the rates prevailing on the transaction
dates, in which case, income and expenses are translated using the exchange rates at the
dates of the transactions); and
(iii)
all resulting currency translation differences are recognised in other comprehensive income
and accumulated in the currency translation reserve. The currency translation differences are
reclassified to profit or loss on disposal or partial disposal of the entity giving rise to such
reserve.
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as
assets and liabilities of the foreign operations and translated at the closing rates at the reporting
date.
