Singapore Airlines 2014 Annual Report Download - page 131

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ANNUAL REPORT FY2013/14
2 Summary of Significant Accounting Policies (continued)
(aj)฀ Segment฀reporting฀(continued)
(ii) Geographical segment
The analysis of revenue by area of original sale from airline operations is derived by allocating revenue to the area
in which the sale was made. Revenue from other operations, which consist principally of engineering services and
cargo operations, is derived in East Asia and therefore, is not shown.
Assets, which consist principally of flight and ground equipment, support the entire worldwide transportation
system, and are mainly located in Singapore. An analysis of assets and capital expenditure of the Group by
geographical distribution has therefore not been included.
(ak) Exceptional items
Exceptional items are separate items of income and expense of such size, nature or incidence that their separate
disclosure is relevant to explain the performance of the Group for the year.
3 Significant Accounting Judgments and Estimates
Estimates and assumptions concerning the future are made in the preparation of the financial statements. They affect the
application of the Group’s accounting policies, reported amounts of assets, liabilities, income and expenses, and disclosures
made. They are assessed on an ongoing basis and are based on experience and relevant factors, including expectations of
future events that are believed to be reasonable under the circumstances.
(a) Judgments made in applying accounting policies
(i) Determination of control over investees
As at 31 March 2014, the Group owns 20.8% of equity in Virgin Australia Holdings Limited (“Virgin Australia”). It has
been assessed that the Group does not have the ability to exercise significant influence over Virgin Australia due to
the composition of other shareholdings and lack of representation on the Board. Consequently, this investment in
Virgin Australia is treated as a long-term investment, as opposed to an investment in an associated company.
As at 31 March 2014, the Group owns 40.0% of equity in Tiger Airways Holdings Limited (“Tiger Airways”), as
well as an interest in perpetual convertible capital securities acquired during the year that are currently convertible
into a further 12.1% interest in Tiger Airways. It has been assessed that the currently exercisable potential voting
rights are not substantive. The Directors consider that the Group does not have ability to exercise control as it does
not have majority substantive voting rights, does not control the Board, nor any other arrangement which gives it
ability to control. Consequently, this investment in Tiger Airways is treated as an associated company, as opposed
to being a subsidiary company.
(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 that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year are discussed below.