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CDL Hospitality TrustS
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Notes to the Financial Statements
3 Significant accounting policies (cont’d)
3.2 Foreign currencies
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of the
entities in the H-REIT Group and the Stapled Group at the exchange rate at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date
are retranslated to the functional currency at the exchange rate at the reporting date. The foreign
currency gain or loss on monetary items is the difference between amortised cost in the functional
currency at the beginning of the year, adjusted for effective interest and payments during the year,
and the amortised cost in foreign currency translated at the exchange rate at the end of the year.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair
value are retranslated to the functional currency at the exchange rate at the date on which the
fair value was determined. Non-monetary items in a foreign currency that are measured in terms
of historical cost are translated using the exchange rate at the date of the transaction. Foreign
currency differences arising on retranslation are recognised in the statement of total return, except
for differences arising on the retranslation of a fnancial liability designated as a hedge of the
H-REIT Group’s and the Stapled Group’s net investment in a foreign operation that is effective (see
below), which are recognised in unitholders’ funds directly.
Foreign operations
The assets and liabilities of foreign operations are translated to Singapore dollars at exchange rates
prevailing at the reporting date. The income and expenses of foreign operations are translated to
Singapore dollars at exchange rates prevailing at the dates of the transactions.
Foreign currency differences are recognised directly in the foreign currency translation reserve in
unitholders’ funds. When a foreign operation is disposed of such that control, signifcant infuence
or joint control is lost, the cumulative amount in the foreign currency translation reserve related to
that foreign operation is reclassifed to the statement of total return as part of the gain or loss on
disposal. When only part of the interest in a subsidiary that includes a foreign operation is disposed
of while retaining control, the relevant proportion of the cumulative amount is reattributed to non-
controlling interests.
When the settlement of a monetary item receivable from or payable to a foreign operation is
neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from
such a monetary item are considered to form part of a net investment in a foreign operation. These
are recognised directly in the foreign currency translation reserve in unitholders’ funds.
Hedge of net investment in foreign operation
The H-REIT Group and the Stapled Group apply hedge accounting to foreign currency differences
arising between the functional currency of the foreign operation and the H-REIT’s functional
currency (Singapore dollars), regardless of whether the net investment is held directly or through
an intermediate parent.