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102 SINGAPORE AIRLINES

Notes to the Financial Statements

31 March 2012

2 Summary of Signiﬁcant Accounting Policies (continued)

(b) New and revised standards (continued)

FRS 111 Joint Arrangements and Revised FRS 28 Investments in Associates and Joint Ventures (continued)

FRS 111 classiﬁes joint arrangements either as joint operations or joint ventures. Joint operation is a joint arrangement

whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the

liabilities relating to the arrangement whereas joint venture is a joint arrangement whereby the parties that have joint

control of the arrangement have rights to the net assets of the arrangement. FRS 111 requires the determination of

joint arrangement’s classiﬁcation to be based on the parties’ rights and obligations under the arrangement, with the

existence of a separate legal vehicle no longer being the key factor. FRS 111 disallows proportionate consolidation

and requires joint ventures to be accounted for using the equity method. The revised FRS 28 was amended to

describe the application of equity method to investments in joint ventures in addition to associates. The adoption of

FRS 111 and the revised FRS 28 will not affect the Group as the Group does not apply proportionate consolidation

for its joint ventures.

FRS 112 Disclosure of Interests in Other Entities

FRS 112 is effective for ﬁnancial periods beginning on or after 1 January 2013.

FRS 112 is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities,

including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. FRS 112

requires an entity to disclose information that helps users of its ﬁnancial statements to evaluate the nature and risks

associated with its interests in other entities and the effects of those interests on its ﬁnancial statements. As this is

a disclosure standard, it will have no impact to the ﬁnancial position and ﬁnancial performance of the Group when

implemented in 2013.

The consolidated ﬁnancial statements comprise the separate ﬁnancial statements of the Company and its subsidiary

companies as at the end of the reporting period. The ﬁnancial statements of the subsidiary companies used in the

preparation of the consolidated ﬁnancial statements are prepared for the same reporting date as the Company.

Consistent accounting policies are applied to like transactions and events in similar circumstances. A list of the

Group’s subsidiary companies is shown in Note 23 to the ﬁnancial statements.

All intra-group balances, transactions, income and expenses and unrealised proﬁts and losses resulting from intra-

group transactions are eliminated in full.

Business combinations are accounted for by applying the acquisition method. Identiﬁable assets acquired and

liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the

acquisition date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred

and the services are received.

When the Group acquires a business, it assesses the ﬁnancial assets and liabilities assumed for appropriate classiﬁcation

and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the

acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.