Kia 2012 Annual Report Download - page 66

(s) Foreign currency
Transactions in foreign currencies are translated to the respective functional currencies of the Company entities at exchange rates
at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional
currency using the reporting date’s exchange rate. Non-monetary assets and liabilities denominated in foreign currencies that are
measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was
determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate at the date of the transaction.
Foreign currency differences arising on retranslation are recognized in profit or loss, except for differences arising on a financial
liability designated as a hedge of the net investment in a foreign operation, or qualifying cash flow hedges, which are recognized in
other comprehensive income. Also, foreign currency differences arising on settlement of Monetary assets and liabilities are
recognized in profit or loss.
The assets and liabilities of foreign operations are translated to presentation currency at exchange rates at the reporting date. The
income and expenses of foreign operations are translated to presentation currency at exchange rates at the dates of the
transactions. Foreign currency differences are recognized in other comprehensive income
(t) Equity capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of ordinary shares and share
options are recognized as a deduction from equity, net of any tax effects.
When the Company repurchases its share capital, the amount of the consideration paid is recognized as a deduction from equity
and classified as treasury shares. The profits or losses from the purchase, disposal, reissue, or retirement of treasury shares are
not recognized as current profit or loss. If the Company acquires and retains treasury shares, the consideration paid or received is
directly recognized in equity.
(u) Revenue
Revenue from sale of goods or the use by others of the Company assets is measured at the fair value of the consideration received
or receivable, net of trade discounts, volume rebates and cash incentives to the customers.
Revenue from sales of vehicles, service parts and other related products is recognized when the Company has transferred to the
buyer the significant risk and rewards of ownership of the goods, the Company retains neither continuing managerial involvement
to the degree usually associated with ownership nor effective control over the goods sold, the amount of revenue can be measured
reliably, it is probable that the economic benefits associated with the transaction will flow to the Company and the costs incurred
or to be incurred in respect of the transaction can be measured reliably.
The Company accounts for sales of goods and services under Q Point Program as transactions multiple revenue generation
activities or deliverables. The fair value of the consideration received or receivable in respect of the initial sale is allocated between
the award credits (“Q Points”) and the other components of the sale. The amount allocated to the Q Points is estimated by
reference to the fair value of the points for which they could be sold separately. Such amount is deferred and revenue is recognized
only when the Q Points are redeemed and the Company has fulfilled its obligations rather than the initial point of sales of goods
and services.
Rental income from investment property is recognized in profit or loss on straight-line basis over the term of the lease.
(v) Finance income and finance costs
Finance income comprises interest income on funds invested (including available-for-sale financial assets), dividend income except
for dividend from investment in associates, gains on the disposal of available-for-sale financial assets, changes in the fair value of
financial assets at fair value through profit or loss, and gains on hedging instruments that are recognized in profit or loss. Interest
income is recognized as it accrues in profit or loss, using the effective interest method. Dividend income is recognized in profit
or loss on the date that the Company’s right to receive payment is established, which in the case of quoted securities is the ex-
dividend date.
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For the years ended December 31, 2012 and 2011
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