TAN CHONG MOTOR HOLDINGS BERHAD
Annual Report 2014
58
NOTES TO THE FINANCIAL STATEMENTS
2.
Significant accounting policies (continued)
(b) Foreign currency (continued)
(ii) Operations denominated in functional currencies other than Ringgit Malaysia (RM)
The assets and liabilities of operations denominated in functional currencies other than RM, including
goodwill and fair value adjustments arising on acquisition, are translated to RM at exchange rates at the end
of the reporting period. The income and expenses of foreign operations are translated to RM at exchange
rates at the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income and accumulated in the FCTR in
equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of
the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed
of such that control, significant influence or joint control is lost, the cumulative amount in the FCTR related
to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal.
When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation, the
relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group
disposes of only part of its investment in an associate or joint venture that includes a foreign operation while
retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified
to profit or loss.
(c) Financial instruments
(i)
Initial recognition and measurement
A financial asset or a financial liability is recognised in the statement of financial position when, and only
when, the Group or the Company becomes a party to the contractual provisions of the instrument.
A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at
fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of
the financial instrument.
An embedded derivative is recognised separately from the host contract and accounted for as a derivative if,
and only if, it is not closely related to the economic characteristics and risks of the host contract and the host
contract is not categorised as fair value through profit or loss. The host contract, in the event an embedded
derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the
host contract.
(ii) Financial instrument categories and subsequent measurement
The Group and the Company categorise financial instruments as follows:
Financial assets
(a) Financial assets at fair value through profit or loss
Fair value through profit or loss category comprises financial assets that are held for trading, including
derivatives (except for a derivative that is a designated and effective hedging instrument) or financial
assets that are specifically designated into this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair
values cannot be reliably measured are measured at cost.
Other financial assets categorised as fair value through profit or loss are subsequently measured at
their fair values with the gain or loss recognised in profit or loss.
