NOTES TO
FINANCIAL STATEMENTS
December 31, 2015
72
CITIC ENVIROTECH LTD.
Annual Report
2015
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.24 Foreign currency transactions and translation (cont’d)
Transactions and balances
In preparing the financial statements of the individual entities, transactions in currencies other
than the entity’s functional currency are recorded at the rate of exchange prevailing on the date
of the transaction. At the end of each reporting period, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at the end of the reporting period. Non-monetary
items carried at fair value that are denominated in foreign currencies are retranslated at the rates
prevailing on the date when the fair value was determined. Non-monetary items that are measured
in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on retranslation of monetary
items are included in profit or loss for the year. Exchange differences arising on the retranslation
of non-monetary items carried at fair value are included in profit or loss for the year except for
differences arising on the retranslation of non-monetary items in respect of which gains and losses
are recognised in other comprehensive income. For such non-monetary items, any exchange
component of that gain or loss is also recognised in other comprehensive income.
Consolidated financial statements
For the purpose of presenting consolidated financial statements, the assets and liabilities of
the Group’s foreign operations (including comparatives) are expressed in Singapore dollars using
exchange rates prevailing on the end of the reporting period. Income and expense items (including
comparatives) are translated at the average exchange rates for the year, unless exchange rates
fluctuated significantly during that period, in which case the exchange rates at the dates of the
transactions are used. Exchange differences arising, if any, are recognised in other comprehensive
income and accumulated in a separate component of equity under the header of “currency
translation reserve”.
On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign
operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation,
loss of joint control over a jointly controlled entity that includes a foreign operation, or loss of
significant influence over an associate that includes a foreign operation), all of the accumulated
exchange differences in respect of that operation attributable to the Group are reclassified to profit
or loss. Any exchange differences that have previously been attributed to non-controlling interests
are derecognised, but they are not reclassified to profit or loss.
In the case of a partial disposal (i.e. no loss of control) of a subsidiary that includes a foreign
operation, the proportionate share of accumulated exchange differences are re-attributed to non-
controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. of
associates or jointly controlled entities that do not result in the Group losing significant influence
or joint control), the proportionate share of the accumulated exchange differences is reclassified to
profit or loss.
On consolidation, exchange differences arising from the translation of the net investment in
foreign entities (including monetary items that, in substance, form part of the net investment
in foreign entities), and of borrowings and other currency instruments designated as hedges of
such investments, are recognised in other comprehensive income and accumulated in a separate
component of equity under the header of “currency translation reserve”.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as
assets and liabilities of the foreign operation and translated at the closing rate.
