axiata group berhad | annual report 2015
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3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(x) Foreign currencies (continued)
(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 remeasured. 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 (inclusive of advances to subsidiaries treated as quasi-
investments) denominated in foreign currencies are recognised in the net profit for the financial year, except when deferred in other
comprehensive income as qualifying cash flow hedges and qualifying net investment hedges.
Foreign exchange gains and losses that relate to borrowings are presented in the profit or loss within ‘finance cost’. All other foreign
exchange gains and losses are presented in profit or loss within ‘foreign exchange gains/(losses)’.
Changes in the fair value of monetary securities denominated in foreign currency classified as AFS are analysed between translation
differences resulting from changes in the amortised cost of the securities and other changes in the carrying amount of the securities.
Translation differences related to changes in amortised cost are recognised in the profit or loss for the financial year, and other changes in
carrying amount are recognised in other comprehensive income.
(iii) Group companies (Consolidated financial statements)
The results and financial position of all the Group entities (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 statement of financial position presented are translated at the closing rate at the date of that statements
of financial position;
•
income and expenses for each statements of comprehensive income 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 dates, in which case income and
expenses are translated at the rate on the dates of the transactions); and
•
all resulting exchange differences are recognised as a separate component of other comprehensive income.
Goodwill and fair value adjustments arising on the acquisitions 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 other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken to other
comprehensive income.
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 joint venture 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 relating to that foreign operation recognised in consolidated other comprehensive income and accumulated in the separate
component of equity are reclassified to consolidated profit or loss. 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 NCIs and are not recognised in consolidated profit or loss. For all other partial disposals (that is, reductions in the Group’s ownership
interest in associates or joint ventures that do not result in the Group losing significant influence or joint control) the proportionate share
of the accumulated exchange difference is reclassified to consolidated profit or loss.
(y) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision maker. The Chief
Operating Decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified
as the Board of Directors that makes strategic decisions.
