2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.6
Foreign currency
The 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 the 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 measured.
Exchange differences arising on the settlement of monetary items or on translating monetary
items at the end of the reporting period are recognised in profit or loss.
(b)
Consolidated financial statements
For consolidation purposes, 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 weighted average exchange rates for the year. 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.
2.7
Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition,
property, plant and equipment other than freehold land, are measured at cost less accumulated
depreciation and any accumulated impairment losses.
Freehold land has unlimited useful life and therefore is not depreciated.
58
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
HG METAL MANUFACTURING LIMITED
ANNUAL REPORT 2015
