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Annual Report 2015
3 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.1 Consolidation (cont’d)
Business combinations (cont’d)
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Stapled
Group incurs in connection with a business combination are expensed as incurred.
Subsidiaries
Subsidiaries are entities either controlled by the HBT Group or the H-REIT Group. The Group controls an entity when
it is exposed to or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them with the policies of the Group.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements of the HBT Group, the H-REIT Group and the
Stapled Group.
3.2 Foreign currencies
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of the entities in the HBT Group,
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 financial 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, significant influence or joint control is lost, the cumulative
amount in the foreign currency translation reserve related to that foreign operation is reclassified 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.
NOTES TO THE FINANCIAL STATEMENTS
