Singapore Airlines 2010 Annual Report Download - page 101

ANNUAL REPORT 2009/10
99
2 Summary of Significant Accounting Policies (continued)
(f) Foreign currencies (continued)
All foreign currency monetary assets and liabilities are translated into SGD using year-end exchange rates.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are
translated using the exchange rates as at the dates of the initial transactions. Non-monetary assets and liabilities
measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value
was determined.
Gains and losses arising from conversion of monetary assets and liabilities are taken to the profit and loss account.
For the purpose of the consolidated financial statements, the net assets of the foreign subsidiary, associated and
joint venture companies are translated into SGD at the exchange rates ruling at the end of the reporting period.
The financial 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 recognised initially in other
comprehensive income and accumulated under 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 end of the reporting period.
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 profit 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 benefits associated with the item will flow 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 fixed 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 (fixed rate charged per hour) maintenance
agreements is capitalised by hours flown. Expenditure for other maintenance and repairs is charged to the profit and
loss account. When assets are sold or retired, their costs, accumulated depreciation and accumulated impairment
losses, if any, are removed from the financial statements and any gain or loss resulting from their disposal is
included in the profit and loss account.