NOTES TO
FINANCIAL STATEMENTS
67
GDS Global Limited Annual Report 2015
As at 30 September 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
In preparing the financial statements of the individual entities, transactions in currencies other
than the entity’s functional currency are recorded at the rate of exchange prevailing on the date
of the transaction. At the end of each reporting period, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at the end of the reporting period. Non-monetary
items carried at fair value that are denominated in foreign currencies are retranslated at the rates
prevailing on the date when the fair value was determined. Non-monetary items that are measured
in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on retranslation of monetary
items are included in profit or loss for the period. Exchange differences arising on the retranslation
of non-monetary items carried at fair value are included in profit or loss for the period except for
differences arising on the retranslation of non-monetary items in respect of which gains and losses
are recognised in other comprehensive income. For such non-monetary items, any exchange
component of that gain or loss is also recognised in other comprehensive income.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the
Group’s foreign operations (including comparatives) are expressed in Singapore dollars using
exchange rates prevailing at the end of the reporting period. Income and expense items (including
comparatives) are translated at the average exchange rates for the period, unless exchange rates
fluctuated significantly during that period, in which case the exchange rates at the dates of the
transactions are used. Exchange differences arising, if any, are recognised in other comprehensive
income and accumulated in a separate component of equity under the header of foreign currency
translation reserve.
On the disposal of a foreign operation (i.e. a 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 accumulated exchange differences in respect of that operation attributable to the Group
are reclassified to profit or loss. Any exchange differences that have previously been attributed to
non-controlling interests are derecognised, but they are not reclassified to profit or loss.
In the case of a partial disposal (i.e. no loss of control) of 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.
On consolidation, exchange differences arising from the translation of the net investment in
foreign entities (including monetary items that, in substance, form part of the net investment
in foreign entities), and of borrowings and other currency instruments designated as hedges of
such investments, are recognised in other comprehensive income and accumulated in a separate
component of equity under the header of foreign currency translation reserve.
CASH AND CASH EQUIVALENTS IN THE STATEMENT OF CASH FLOWS - Cash and cash
equivalents in the statement of cash flows comprise cash on hand and demand deposits, bank
overdrafts, and other short-term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value.
3
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
In the application of the Group’s accounting policies, which are described in Note 2, management
is required to make judgements, estimates and assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
