Huawei 2011 Annual Report Download - page 40

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1. Basis of preparation of consolidated financial
statements summary and signicant accounting
policies of the Group
(a) Basis of preparation
Huawei Investment & Holding Co., Ltd. (formerly
"Shenzhen Huawei Investment & Holding Co.,
Ltd.", the “Company”) and its subsidiaries (the
“Group”) have prepared a full set of consolidated
financial statements (“consolidated financial
statements”) for the year ended December
31, 2011 in accordance with International
Financial Reporting Standards (“IFRSs”), which
collective term includes all applicable individual
IFRSs, International Accounting Standards and
Interpretations issued by the International
Accounting Standards Board.
This consolidated financial statements summary
has been prepared and presented based on
the audited consolidated financial statements
for the year ended December 31, 2011 by
means of disclosing operational and financial
information of material nature. The intended
users of the consolidated financial statements
summary can obtain access to the audited
consolidated financial statements for the year
ended December 31, 2011 upon consent of the
Group’s Management through the email address,
[e-mail].
(b) Functional and presentation currency
All nancial information in the consolidated nancial
statements summary is presented in Chinese Yuan,
which is the Company’s functional currency. All
nancial information presented in Chinese Yuan has
been rounded to the nearest million.
(c) Translation of foreign currencies
i) Foreign currency transactions
Transactions in foreign currency during the
year are translated to the respective functional
currencies of group entities at the foreign
exchange rates ruling at the transaction dates.
Monetary assets and liabilities denominated
in foreign currencies at the reporting date are
translated to the functional currency at the
Notes to the Consolidated Financial Statements Summary
foreign exchange rates at that date. Exchange
gains and losses are recognised in prot or loss.
Non-monetary assets and liabilities that are
measured in terms of historical cost in a foreign
currency are translated using the foreign
exchange rates ruling at the transaction dates.
Non-monetary assets and liabilities denominated
in foreign currencies that are stated at fair value
are translated using the foreign exchange rates
ruling at the dates the fair value was determined.
ii) Foreign operations
The results of foreign operations, except
for foreign operations in hyperinflationary
economies, are translated into Chinese Yuan at
the exchange rates approximating the foreign
exchange rates ruling at the dates of the
transactions. Balance sheet items are translated
into Chinese Yuan at the closing foreign
exchange rates at the balance sheet date. The
resulting exchange differences are recognised in
other comprehensive income and accumulated
separately in equity in the exchange reserve.
However, if the operation is a non-wholly-owned
subsidiary, then the relevant proportionate share
of the translation difference is allocated to the
non-controlling interest.
The results of foreign operations in hyperinationary
economies are translated to Chinese Yuan at the
exchange rate ruling at the balance sheet date.
Prior to translating the financial statements
of foreign operations in hyperinflationary
economies, their financial statements for the
current year are restated to account for changes
in the general purchasing power of the local
currency. The restatement is based on relevant
price indices at the balance sheet date.
When a foreign operation is disposed of such
that control, signicant inuence or joint control
is lost, the cumulative amount in the translation
reserve related to that foreign operation is
reclassied to prot 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
Consolidated Financial Statements Summary and Notes