Annual Report 2016
129
Financial Section
3 Principal Accounting Policies
(continued)
(aa) Foreign currencies
(continued)
(iii) Group companies
The results and financial position of all the Group entities that have a functional currency different from the
presentation currency are translated into the presentation currency as follows:
(1)
assets and liabilities for each consolidated statement of financial position presented are translated at the
exchange rate ruling at the date of that consolidated statement of the financial position;
(2)
income and expenses for each consolidated income statement are translated at the average exchange
rate during the period covered by the consolidated income statement;
(3)
all resulting exchange differences are recognised as a separate component of equity; and
(4)
on the 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, all of the exchange differences accumulated in equity
in respect of that operation attributable to the equity holders of the company are reclassified to 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 non-
controlling interests and are not recognised in profit or loss. For all other partial disposals (that is, reductions in
the Group’s ownership interest in associated companies 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 profit or loss.
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 exchange rate ruling at the end of the reporting period.
(ab) Insurance contracts
The Group assesses at the end of each reporting period the liabilities under its insurance contracts using current
estimates of future cash flows. If the carrying amount of the relevant insurance liabilities less than the best estimate
of the expenditure required to settle the relevant insurance liabilities at the end of the reporting period, the Group
recognises the entire difference in profit or loss. These estimates are recognised only when the outflow is probable
and the estimates can be reliably measured.
The Group regards its financial guarantee contracts in respect of mortgage facilities provided to certain property
purchasers, guarantees provided to its related parties and tax indemnity provided to its non-wholly owned subsidiary
as insurance contracts.
(ac) 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 Executive Committee of the Board of Directors of
the Company that makes strategic decisions.
Segment assets consist primarily of property, plant and equipment, land use rights, investment properties, intangible
concession rights, intangible assets, available-for-sale financial assets, held-to-maturity investments, financial assets
at fair value through profit or loss, properties for development, other non-current assets, properties under
development, properties held for sale, inventories and receivables and exclude derivative financial instruments,
deferred tax assets, restricted bank balances and cash and bank balances. Segment liabilities comprise operating
liabilities and exclude items such as taxation and borrowings.
(ad) Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the financial statements in the
financial period when the dividends are approved by the Company’s shareholders/directors, where appropriate.
