140 / 222
FINANCIAL REPORTS
132
Bursa Malaysia •
Annual Report 2015
NOTES TO THE
FINANCIAL STATEMENTS
31 DECEMBER 2015
2. Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(r) Foreign currency (cont’d.)
(ii) Foreign currency transactions
In preparing the financial statements of the individual entities, transactions in foreign currencies are measured in the respective
functional currencies at the exchange rates approximating those ruling at the transaction dates. At each financial year end, monetary
assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the financial year end. Non-
monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at
the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using
the exchange rates at the dates when the fair value was determined.
Exchange differences arising from the settlement of monetary items, or on translating monetary items at the financial year end are
recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in
foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation
reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the
foreign operation.
Exchange differences arising from the translation of non-monetary items carried at fair value are not included in profit or loss for the
period until their impairment or disposal.
(iii) Malaysian subsidiary with foreign currency as its functional currency
The results and financial position of a subsidiary that has a functional currency different from the presentation currency of the
consolidated financial statements are translated into RM as follows:
•
Assets and liabilities for each statement of financial position presented are translated at the closing rate prevailing at the financial
year end;
•
Income and expenses for each statement of comprehensive income or separate income statement presented are translated at
average monthly exchange rates, which approximate the exchange rates at the dates of the transactions; and
•
All resulting exchange differences are recognised directly in other comprehensive income. On disposal of a subsidiary with foreign
currency as its functional currency, the cumulative amount recognised in other comprehensive income and accumulated in equity
under foreign currency translation reserve relating to that particular subsidiary is recognised in profit or loss.
(s) Contingencies
A contingent liability or asset is a possible obligation or benefit that arises from past events, and the existence of which will be confirmed
only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group and of the Company.
Contingent liabilities and assets are not recognised in the statements of financial position of the Group and of the Company in the current
and previous financial year ends.