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NATURAL COOL HOLDINGS LIMITED
Annual Report 2011 52
Notes to the Financial Statement
For the year ended 31st December 2011
3 Signifcant accounting policies (Continued)
3.2 Foreign currency (Continued)
(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 end
of the reporting period. 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 closing rate. For
acquisitions prior to 1 January 2005, the exchange rates at the date of acquisition were used.
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, signifcant infuence or joint control is lost, the cumulative
amount in the translation reserve related to that foreign operation is reclassifed to proft
or loss 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 settlement of a monetary item receivable from or payable to a foreign operation
is neither planned nor likely in the foreseeable future, foreign exchange gains and losses
arising from such a monetary item are considered to form part of a net investment in a foreign
operation. These are recognised in other comprehensive income, and are presented in the
translation reserve in equity.
3.3 Financial instruments
(i) Non-derivative financial assets
The Group initially recognises loans and receivables and deposits on the date that they are
originated. All other fnancial assets are recognised initially on the trade date, which is the date
that the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a fnancial asset when the contractual rights to the cash fows from
the asset expire, or it transfers the rights to receive the contractual cash fows on the fnancial
asset in a transaction in which substantially all the risks and rewards of ownership of the
fnancial asset are transferred. Any interest in transferred fnancial assets that is created or
retained by the Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the balance sheet
when, and only when, the Group has a legal right to offset the amounts and intends either to
settle on a net basis or to realise the asset and settle the liability simultaneously.
The Group classifes non-derivative fnancial assets into the loans and receivables category.