FRENCKEN GROUP LIMITED
ANNUAL REPORT 2015
59
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONT’D)
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(e) Impairment of non-financial assets (Cont’d)
(ii)
Property, plant and equipment, investments in subsidiaries and associates and intangible assets
(excluding goodwill)
Property, plant and equipment, investments in subsidiaries and associates, and intangible assets (excluding
goodwill) are tested for impairment whenever there is any objective evidence or indication that these
assets may be impaired. If any such indication exists, the recoverable amount (i.e. the higher of the fair
value less cost to sell and value-in-use) of the asset is estimated to determine the amount of impairment
loss.
For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost
to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate
cash flows that are largely independent of those from other assets. If this is the case, recoverable amount
is determined for the CGU to which the asset belongs.
If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the
carrying amount of the asset (or CGU) is reduced to its recoverable amount. The impairment loss is
recognised in the income statement.
An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change
in the estimates used to determine the assets’ recoverable amount since the last impairment loss was
recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable
amount, provided that this amount does not exceed the carrying amount that would have been determined
(net of any accumulated amortisation or depreciation) had no impairment loss been recognised for the
asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in the
income statement.
(f) Currency translation
(i)
Functional and presentation currency
Items included in the financial statements of each entity in the Group are measured using the currency of
the primary economic environment in which the entity operates (“functional currency”). The consolidated
financial statements are presented in Singapore dollar (“$”), which is the Company’s functional and
presentation currency.
(ii)
Transactions and balances
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 translation
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 the income statement, unless they arise from net investment in foreign operations. Those
currency translation differences are recognised in the currency translation reserve in the consolidated
financial statements and transferred to the income statement as part of gain or loss on disposal of the
foreign operation.
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.
