3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
3.2 Foreign currencies
(continued)
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition of foreign
operations, are translated to Singapore Dollars for consolidation at the rates of exchange ruling at the balance sheet date.
The results of foreign operations are translated at the average exchange rates for the year. Equity items are translated at
historical transaction rates, with pre-acquisition equity items at the closing exchange rates at acquisition date.
Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency 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 non-controlling interests. When a foreign operation is disposed of such that control
or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to
income statement as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary
that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to
non-controlling interests. When the Group disposes of only part of its investment in a joint venture that includes a foreign
operation while retaining joint control, the relevant portion of the cumulative amount is reclassified to income statement.
Net investment in a foreign operation
Exchange differences arising from monetary items that in substance form part of the Company’s net investment in a foreign
operation are recognised in the Company’s income statement. Such exchange differences are reclassified to equity in the
consolidated financial statements. When such investment is disposed of, the cumulative amount in equity is transferred to
profit or loss as part of the gain or loss on disposal.
3.3 Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets
includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working
condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are
located and capitalised borrowing costs. Purchased software that is integral to the functionality of the related equipment is
capitalised as part of that equipment.
When parts of an item of property, plant and equipment have different useful lives they are accounted for as separate items
(major components) of property, plant and equipment.
Gains and losses arising from the retirement or disposal of property, plant and equipment are determined as the difference
between the estimated net disposal proceeds and the carrying amount of the asset and are recognised in the income statement
on the date of retirement or disposal.
66
TELECHOICE INTERNATIONAL LIMITED
2015 ANNUAL REPORT
NOTES TO THE
FINANCIAL STATEMENTS
