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Annual Report 2013
KPJ HEALTHCARE BERHAD
181
2.
Summary of signi cant accounting policies (continued)
2.6
Foreign currency
(a)
Functional and presentation currency
The individual nancial statements of each entity in the Group are measured using the currency of the primary economic
environment in which the entity operates (“the functional currency”). The consolidated nancial statements are presented
in Ringgit Malaysia (RM), which is also the Company’s functional currency.
(b)
Foreign currency transactions
Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries
and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the
transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange
ruling at the reporting date. Non-monetary items denominated in foreign currencies that are measured at historical cost
are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items denominated in
foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was
determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date
are recognised in pro t or loss except for exchange differences arising on monetary items that form part of the Group’s net
investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under
foreign currency translation reserve in equity. The foreign currency translation reserve is reclassi ed from equity to pro t or
loss of the Group on disposal of the foreign operation.
Exchange differences arising on the translation of non-monetary items carried at fair value are included in pro t or loss for
the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses
are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly
in equity.
(c) Foreign operations
The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the reporting date and
income and expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on
the translation are taken directly to other comprehensive income. On disposal of a foreign operation, the cumulative amount
recognised in other comprehensive income and accumulated in equity under foreign currency translation reserve relating to
that particular foreign operation is recognised in the pro t or loss.
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the
foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at
the reporting date.
Notes to the
Financial Statements
For the financial year ended 31 December 2013
(continued)