Basic HTML Version
97
Glorious Property
Annual Report 2011
Notes to the Consolidated Financial Statements
(Continued)
31 December 2011
2 Summary of Significant Accounting Policies
(Continued)
(c) FOREIGN CURRENCY TRANSLATION
(i) Functional and presentation currency
Items included in the financial statements of each of the companies comprising the Group are measured using
the currency of the primary economic environment in which the company operates (the “functional currency”).
The consolidated financial statements is presented in Renminbi (“RMB”), which is the Company’s functional and
presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in the consolidated statement of comprehensive
income.
(iii) Group companies
The results and financial positions of all the companies comprising the Group (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are translated
into the presentation currency as follows:
— Assets and liabilities for each balance sheet of the companies comprising the Group are translated at the
closing rate at the date of that balance sheet;
— Income and expenses for each statement of comprehensive income of the companies comprising the Group are
translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction date; in which case income and expenses are translated at the
rate on the dates of the transactions); and
— All resulting exchange differences are recognised in other comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities
of the foreign entity and translated at the closing rate. Exchange differences arising are recognised in equity.
On the disposal of a foreign operation (that is, a disposal of the Group’s entire interest in a foreign operation,
or a disposal involving loss of control over a subsidiary that includes a foreign operation, a disposal involving
loss of joint control over a jointly controlled entity that includes a foreign operation, or a disposal involving
loss of significant influence over an associate that includes a foreign operation), all of the exchange differences
accumulated in equity in respect of that operation attributable to the Company’s equity holders are reclassified to
the consolidated statement of comprehensive income.
In the case of a partial disposal that does not result in the Group losing control over a subsidiary that includes a
foreign operation, the proportionate share of accumulated exchange differences are re-attributed to non-controlling
interests and are not recognised in the consolidated statement of comprehensive income. For all other partial
disposals (that is, reductions in the Group’s ownership interest in associates or jointly controlled entities that do
not result in the Group losing significant influence or joint control) the proportionate share of the accumulated
exchange difference is reclassified to the consolidated statement of comprehensive income.