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75
Singapore Airlines Annual Report 05/06
NOTES TO THE FINANCIAL STATEMENTS
31 March 2006
1 General
Singapore Airlines Limited (“the Company”) is a limited liability company incorporated in the Republic of Singapore which is also
the place of domicile. The Company is a subsidiary company of Temasek Holdings (Private) Limited, incorporated in the Republic
of Singapore.
The registered offi ce of the Company is at Airline House, 25 Airline Road, Singapore 819829.
The principal activities of the Group consist of passenger and cargo air transportation, airport terminal services, engineering
services, training of pilots, air charters and tour wholesaling and related activities. The principal activity of the Company consists
of passenger air transportation.
The fi nancial statements for the fi nancial year ended 31 March 2006 were authorised for issue in accordance with a resolution of
the Board of Directors on 9 May 2006.
2 Accounting Policies
The main accounting policies of the Group, which have been consistently applied except where indicated otherwise, are
described in the following paragraphs.
(a) Basis of accounting
The fi nancial statements of the Group and of the Company, which are expressed in Singapore dollars (SGD or $), are
prepared under the historical cost convention except as disclosed in the accounting policies below, and in accordance with
Singapore Financial Reporting Standards (“FRS”) as required by the Singapore Companies Act, Cap. 50.
(b) Changes in accounting policies
On 1 April 2005, the Group and the Company adopted all new or revised FRS that are applicable in the current fi nancial year.
The 2004-05 fi nancial statements have been amended as required, in accordance with the relevant transitional provisions in
the respective FRS. Those FRS with signifi cant fi nancial impact are disclosed in Note 3.
(c) Signifi cant accounting estimates
Estimates and assumptions concerning the future are made in the preparation of the fi nancial 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 on-going basis and are based on experience and relevant factors, including expectations of
future events that are believed to be reasonable under the circumstances.
The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that
have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
fi nancial year are discussed below.
(i) Impairment of fi xed assets – aircraft fl eet
Impairment is recognised when events and circumstances indicate that the aircraft may be impaired and the carrying
amounts of the aircraft exceed the recoverable amounts. In determining the recoverable amounts of the aircraft, certain
estimates regarding the current fair market value of the aircraft are made. The current fair market value is determined
based on desktop valuations from an independent appraisal for fl eet with similar operational lives.
(ii) Depreciation of fi xed assets – aircraft fl eet
Aircraft are depreciated on a straight-line basis at rates which are calculated to write-down their cost to their estimated
residual values at the end of their operational lives. Certain estimates regarding the operational lives and residual values
of the fl eet are made by the Company based on past experience and these are in line with the industry. The operational
lives and residual values are reviewed on an annual basis.