FRASERS HOSPITALITY TRUST ANNUAL REPORT 2015
201
NOTES TO THE FINANCIAL STATEMENTS
30 SEPTEMBER 2015
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.3
Functional currency
Items included in the financial statements of the Company are measured using the currency that best reflects
the economic substance of the underlying events and circumstances relevant to the entity (the “functional
currency”). The financial statements of the Company are presented in Singapore Dollars, the functional currency
of the Company.
3.4
Financial assets
Financial assets within the scope of FRS 39 are classified as either financial assets at fair value through profit or
loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets, as appropriate.
Financial assets are recognised when, and only when, the Company becomes a party to the contractual
provisions of the financial instrument.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets
not at fair value through profit and loss, directly attributable transaction costs.
The Company determines the classification of its financial assets after initial recognition and, where allowed and
appropriate, re-evaluates this designation at each financial year end.
Non-derivative financial assets with fixed or determinable payment that are not quoted in an active market are
classified as loans and receivables. Such assets are initially recognised at fair value, plus directly attributable
costs, and subsequently carried at amortised cost using the effective interest method. Gains and losses are
recognised in the Statement of Comprehensive Income when the loans and receivables are derecognised or
impaired and through the amortisation process.
3.5
Receivables
Trade and other receivables, including amount due from immediate holding company are classified and
accounted for as loans and receivables under FRS 39. The accounting policy is stated in Note 3.4.
An allowance is made for uncollectible amounts when there is objective evidence that the Company will not
be able to collect the debt. Bad debts are written off when identified. Further details of accounting policy for
impairment of financial assets are stated in Note 3.8.
3.6
Financial liabilities
Financial liabilities within the scope of FRS 39 are recognised when, and only when, the Company becomes a
party to the contractual provisions of the financial instrument. Financial liabilities are recognised initially at fair
value plus directly attributable transaction costs.
Subsequent to initial recognition, financial liabilities are measured at amortised cost using the effective interest
method. Gains and losses are recognised in the Statement of Comprehensive Income when the liabilities are
derecognised, and through the amortisation process.
3.7
Provisions
Provisions are recognised when there is a present obligation (legal or constructive) as a result of a past event
and it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation, and a reliable estimate can be made of the amount of the obligation.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no
longer probable that an outflow of economic resources will be required to settle the obligation, the provision is
reversed. Where the effect of time value of money is material, provisions are discounted using a current pre-tax
rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in
the provision due to the passage of time is recognised as a finance cost.
