48
TEHO INTERNATIONAL INC LTD.
Annual Report 2016
NOTES
TO THE FINANCIAL STATEMENTS
Year ended 30 June 2016
3 SIGNIFICANTACCOUNTING POLICIES (CONT’D)
3.1 Basis of consolidation (cont’d)
(iii) Investments in associates (equity-accounted investees) (cont’d)
When the Group’s share of losses exceeds its interest in an equity-accounted
investee, the carrying amount of the investment, together with any long-term
interests that form part thereof, is reduced to zero, and the recognition of further
losses is discontinued except to the extent that the Group has an obligation to
fund the investee’s operations or has made payments on behalf of the investee.
(iv) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses
arising from intra-group transactions, are eliminated in preparing the consolidated
financial statements. Unrealised gains arising from transactions with equity-
accounted investees are eliminated against the investment to the extent of the
Group’s interest in the investee. Unrealised losses are eliminated in the same way
as unrealised gains, but only to the extent that there is no evidence of impairment.
(v) Subsidiaries and associates in the separate financial statements
Investments in subsidiaries and associates are stated in the Company’s statement
of financial position at cost less accumulated impairment losses.
3.2 Foreign currency
(i)
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional
currencies of Group entities at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the reporting
date are retranslated to the functional currency at the exchange rate at that date.
The foreign currency gain or loss on monetary items is the difference between
amortised cost in the functional currency at the beginning of the year, adjusted
for effective interest and payments during the year, and the amortised cost in
foreign currency translated at the exchange rate at the end of the year.
3 SIGNIFICANTACCOUNTING POLICIES (CONT’D)
3.2 Foreign currency (cont’d)
(i)
Foreign currency transactions (cont’d)
Non-monetary assets and liabilities denominated in foreign currencies that are
measured at fair value are retranslated to the functional currency at the exchange
rate at the date that the fair value was determined. Non-monetary items in
a foreign currency that are measured in terms of historical cost are translated
using the exchange rate at the date of the transaction. Foreign currency differences
arising on retranslation are recognised in profit or loss.
(ii) Foreign operations
The assets and liabilities of foreign operations, excluding goodwill and fair
value adjustments arising on acquisition, are translated to Singapore dollars
at exchange rates at the reporting date. The income and expenses of foreign
operations are translated to Singapore dollars at exchange rates at the dates of
the transactions. Goodwill and fair value adjustments arising on the acquisition of
a foreign operation on or after 1 January 2005 are treated as assets and liabilities
of the foreign operation and translated at the exchange rate at the end of the
reporting period.
Foreign currency differences are recognised in other comprehensive income
and presented in the foreign currency translation reserve (translation reserve)
in equity. However, if the foreign operation is a non-wholly-owned subsidiary,
then the relevant proportionate share of the translation difference is allocated to
the non-controlling interests. When a foreign operation is disposed of such that
control or significant influence is lost, the cumulative amount in the translation
reserve related to that foreign operation is reclassified to profit or loss as part of
the gain or loss on disposal.
