Singapore Airlines 2008 Annual Report Download - page 102

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Singapore Airlines Annual Report 2007-08
100
2 Accounting Policies (continued)
(af) Derivative financial instruments and hedging (continued)
Hedges which meet the criteria for hedge accounting are accounted for as follows:
Cash flow hedges
For cash flow hedges, the effective portion of the gain or loss on the hedging instrument is recognised directly in the
fair value reserve (Note 16), while the ineffective portion is recognised in the profit and loss account.
Amounts taken to the fair value reserve are transferred to the profit and loss account when the hedged transaction
affects profit or loss, such as when a forecast sale or purchase occurs. If the hedged item is a non-financial asset or
liability, the amounts taken to the fair value reserve are transferred to the initial carrying amount of the non-financial
asset or liability.
Fair value hedges
For fair value hedges, the gain or loss on the hedging instrument is taken directly to profit and loss account.
(ag) Segmental reporting
(i) Business segment
The Group’s businesses are organised and managed separately according to the nature of the services provided.
The significant business segments of the Group are airline operations, airport terminal services and engineering
services.
(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 consists principally of airport terminal services
and engineering services, is derived in Singapore and therefore, is not shown.
Assets, which consist principally of flight and ground equipment, support the entire worldwide transportation
system, are mainly located in Singapore. An analysis of assets and capital expenditure of the Group by
geographical distribution has therefore not been included.
NOTES TO THE FINANCIAL STATEMENTS
31 March 2008