Notes to the Financial Statements
(Cont’d)
For the year ended 30 April 2015
(In Singapore Dollars)
45
STAMFORD TYRES CORPORATION LIMITED
BUILDING ON OUR EXTENSIVE NETWORK
2.
Summary of significant accounting policies (cont’d)
2.6
Foreign currency
The Group’s consolidated financial statements are presented in Singapore Dollars, which is also the
Company’s functional currency. Each entity in the Group determines its own functional currency and items
included in the financial statements of each entity are measured using that functional currency.
(a)
Transactions and balances
Transactions in foreign currencies are measured in the respective functional currencies of the
Company and its subsidiaries and are recorded on initial recognition in the functional currencies at
exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities
denominated in foreign currencies are translated at the rate of exchange ruling at the end of each
reporting period. Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates as at the dates of the initial transactions. Non-
monetary items measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined.
Exchange differences arising on monetary items that for part of the Group’s net investment in
foreign operations 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.
(b)
Consolidated financial statements
For consolidation purpose, the assets and liabilities of foreign operations are translated into SGD at
the rate of exchange ruling at the end of the reporting period and their profit or loss are translated
at the exchange rates prevailing at the date of the transactions. The exchange differences arising
on the translation are recognised in other comprehensive income. On disposal of a foreign
operation, the component of other comprehensive income relating to that particular foreign
operation is recognised in profit or loss.
In the case of a partial disposal without loss of control of a subsidiary that includes a foreign
operation, the proportionate share of the cumulative amount of the exchange differences are re-
attributed to non-controlling interest and are not recognised in profit or loss. For partial disposals of
associates or jointly controlled entities that are foreign operations, the proportionate share of the
accumulated exchange differences is reclassified to profit or loss.
2.7
Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost and subsequently measured at
cost less accumulated depreciation and accumulated impairment losses. The cost includes the cost of
replacing part of the property, plant and equipment and borrowing costs that are directly attributable to
the acquisition, construction or production of a qualifying property, plant and equipment. The accounting
policy for borrowing costs is set out in Note 2.18.
The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable
that future economic benefits associated with the item will flow to the Group and the cost can be
measured reliably.
