73
ANNUAL REPORT 2014/2015
NOTES TO THE FINANCIAL STATEMENTS
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Foreign currency
Foreign currency transactions
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 exchange 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.
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. 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 operations
The results and balance sheets 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 (“OCI”)
and accumulated in the foreign currency translation reserve. These currency translation differences are
reclassified to profit or loss on disposal of the entity giving rise to such reserve.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned
nor likely to occur in the foreseeable future, foreign exchange gains and losses arising from such a monetary
item that are considered to form part of a net investment in a foreign operation are recognised in OCI, and
are presented in the foreign currency translation reserve in equity.
