Singapore Airlines 2009 Annual Report Download - page 98

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NOTES TO THE FINANCIAL STATEMENTS
31 March 2009
2 Accounting Policies (continued)
(b) New and revised standards (continued)
Amendments to FRS 107: Improving Disclosures about Financial Instruments
The amendments to FRS 107 introduce a three-level hierarchy for fair value measurement disclosures
and require the Group to provide additional disclosures about the relative reliability of fair value
measurements, thereby helping to improve comparability between entities about the effects of fair
value measurements. Additionally, the amendments clarify and enhance the existing requirements for
the disclosure of liquidity risk. This is aimed at ensuring that the information disclosed enables users of
the Group’s fi nancial statements to evaluate the nature and extent of liquidity risk arising from fi nancial
instruments and how the Group manages that risk.
INT FRS 113: Customer Loyalty Programmes
The interpretation addresses accounting for loyalty award credits granted to customers who buy other
goods or services, and the accounting for the Company’s obligations to provide free or discounted
goods or services to customers when the award credits are redeemed.
Loyalty awards should be viewed as separately identifi able goods or services for which customers are
implicitly paying and measured based on the allocated proceeds which represent the value of the award
credits. The proceeds allocated to the award credits are deferred until the Company fulfi ls its obligations
by supplying the free or discounted goods or services upon the redemption of the award credits.
The adoption of this interpretation should not result in a change in accounting policy of the Company
as the current accounting treatment of the Company’s award credits granted under the frequent fl yer
programme (“KrisFlyer”) is closely aligned with the treatment as set out in the interpretation.
(c) Basis of consolidation
The consolidated fi nancial statements comprise the separate fi nancial statements of the Company
and its subsidiary companies as at the balance sheet date. The fi nancial statements of the subsidiary
companies used in the preparation of the consolidated fi nancial statements are prepared for the same
reporting date as the Company. Consistent accounting policies are applied for like transactions and
events in similar circumstances. A list of the Group’s subsidiary companies is shown in Note 22 to the
fi nancial statements.
All intra-group balances, transactions, income and expenses and profi ts and losses resulting from
intra-group transactions are eliminated in full.
Acquisitions of subsidiary companies are accounted for using the purchase method. Identifi able assets
acquired and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date. Adjustments to those fair values relating to previously
held interests are treated as a revaluation and recognised in equity. Any excess of the cost of the
business combination over the Group’s share in the net fair value of the acquired subsidiary company’s
identifi able assets, liabilities and contingent liabilities is recorded as goodwill on the balance sheet.