3.
SIGNIFICANT ACCOUNTING POLICIES
(continued)
(a) Basis of consolidation
(continued)
(iv) Accounting for subsidiaries by the Trust
Investments in subsidiaries are stated in the Trust’s statement of financial position at
cost less accumulated impairment losses.
(b) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated at the foreign exchange rates ruling
at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies at the reporting date are retranslated at the foreign exchange rates ruling
at that date. Non-monetary assets and liabilities measured at cost in a foreign currency
are translated using foreign exchange rates at the date of the transaction. Non-
monetary assets and liabilities denominated in foreign currencies that are measured at
fair value are retranslated at the foreign exchange rates ruling at the date on which the
fair value was determined.
Foreign currency differences arising on retranslation are recognised in the statement
of total return, except for differences arising on the retranslation of monetary items that
in substance form part of the Group’s net investment in a foreign operation (see below)
and financial derivatives designated as hedges of the net investment in a foreign
operation (see Note 3(c)(iii)).
(ii) Foreign operations
The assets and liabilities of foreign operations 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
are treated as assets and liabilities of the foreign operation and translated at the
exchange rate at the reporting date.
Foreign currency differences are recognised in the foreign currency translation
reserve. When a foreign operation is disposed of, in part or in full, the relevant amount
is transferred to the statement of total return.
(iii) Net investment in a foreign operation
Exchange differences arising from monetary items that in substance form part of the
Trust’s net investment in a foreign operation are recognised in the Trust’s statement of
total return. Such exchange differences are reclassified to foreign currency translation
reserve in the consolidated financial statements. When the hedged net investment is
disposed of, the cumulative amount in the foreign currency translation reserve is
transferred to the statement of total return as an adjustment to the gain or loss arising
on disposal.
Notes to the Financial Statements
94 | CapitaRetail China Trust Annual Report 2014
