NOTES
TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2016
(In Singapore dollars)
52
ANNUAL REPORT 2015/2016
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.4
Significant accounting estimates and judgments (cont’d)
(b)
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of
the reporting period are discussed below. The Group based its assumptions and estimates on parameters
available when the financial statements were prepared. Existing circumstances and assumptions about
future developments, however, may change due to market changes or circumstances arising beyond the
control of the Group. Such changes are reflected in the assumptions when they occur.
Impairment of goodwill
The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation
of the value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in
use requires the Group to make an estimate of the expected future cash flows from the cash-generating
units and to choose a suitable discount rate in order to calculate the present value of those cash flows.
The carrying amounts of goodwill and key assumptions applied in the determination of the value in use
including sensitivity analysis are disclosed in Note 9.
Impairment of property, plant and equipment
For assets with indicators of impairment, management determines the recoverable amount of the assets
based on fair value less costs to sell for leasehold buildings and value in use calculations for plant and
equipment. The fair values of the Group’s leasehold buildings are determined by an accredited independent
valuer using recognised valuation techniques which comprise recent sales of similar properties within the
vicinity, income approach and replacement cost approach. The carrying amount of the Group’s leasehold
buildings as at 31 March 2016 is $20,613,000 (2015: $21,464,000). The key assumptions applied in the
determination of the value in use are disclosed in Note 12.
2.5
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 the profit or loss except for exchange differences arising on
monetary items that form part of the Group’s net investment in foreign operations, which 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.
