Singapore Airlines 2009 Annual Report Download - page 102

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NOTES TO THE FINANCIAL STATEMENTS
31 March 2009
2 Accounting Policies (continued)
(f) Foreign currencies (continued)
For the purpose of the consolidated fi nancial statements, the net assets of the foreign subsidiary,
associated and joint venture companies are translated into SGD at the exchange rates ruling at the
balance sheet date. The fi nancial results of foreign subsidiary, associated and joint venture companies
are translated monthly into SGD at the prevailing exchange rates. The resulting gains or losses on
exchange are taken to foreign currency translation reserve.
Goodwill and fair value adjustments arising from the acquisition of foreign operations on or after
1 April 2005 are treated as assets and liabilities of the foreign operations and are recorded in the
functional currency of the foreign operations, and translated into SGD at the closing rate at the balance
sheet date.
Goodwill and fair value adjustments which arose on acquisitions of foreign operations before 1 April
2005 are deemed to be assets and liabilities of the Group and are recorded in SGD at the rates prevailing
at the dates of acquisition.
On disposal of a foreign operation, the cumulative amount of exchange differences deferred in equity
relating to that foreign operation is recognised in the profi t and loss account as a component of the gain
or loss on disposal.
(g) Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition,
property, plant and equipment are stated at cost less accumulated depreciation and accumulated
impairment losses, if any. The cost of an item of property, plant and equipment is recognised as an
asset if, and only if, it is probable that future economic benefi ts associated with the item will fl ow to the
Group and the cost of the item can be measured reliably.
The cost of an item of property, plant and equipment comprises its purchase price and any directly
attributable costs of bringing the asset to working condition for its intended use. The cost of all aircraft
is stated net of manufacturers’ credit. Aircraft and related equipment acquired on an exchange basis are
stated at amounts paid plus the fair value of the fi xed asset traded-in. Expenditure for heavy maintenance
visits on aircraft and engine overhauls, is capitalised at cost. Expenditure for engine overhaul costs
covered by “power-by-hour” (fi xed rate charged per hour) maintenance agreements is capitalised by
hours fl own. Expenditure for other maintenance and repairs is charged to the profi t and loss account.
When assets are sold or retired, their costs, accumulated depreciation and accumulated impairment
losses, if any, are removed from the fi nancial statements and any gain or loss resulting from their
disposal is included in the profi t and loss account.