. 88
NOTESTOTHE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017
BAKER
TECHNOLOGY
L IMI TED
THE BE ST
I N US
2.
SUMMARYOF SIGNIFICANTACCOUNTINGPOLICIES (CONT’D)
2.4
Foreigncurrency
The financial statements are presented in Singapore Dollars, which is also the Company’s functional
currency. Eachentity in theGroupdetermines itsown functional currencyand items included in the financial
statements of eachentity aremeasuredusing that functional currency.
(a)
Transactionsandbalances
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 end of the
reporting period. Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates as at the dates of the initial transactions. Non-
monetary itemsmeasured at fair value in a foreign currency are translatedusing the exchange rates
at thedatewhen the fair valuewasmeasured.
Exchangedifferences arisingon the settlement ofmonetary items or on translatingmonetary items
at theendof the reportingperiod are recognised inprofit or loss.
(b)
Consolidated financial statements
For consolidationpurposes, the assets and liabilities of foreignoperations are translated into SGD at
the rate of exchange ruling at the end of the reporting period and their profit or loss are translated
at theexchange rates prevailing at thedateof the transactions. Theexchangedifferences arisingon
the translation are recognised in other comprehensive income. On disposal of a foreign operation,
the component of other comprehensive income relating to that particular foreign operation is
recognised inprofit or loss.
2.5
Subsidiaries
Asubsidiary isan investee that iscontrolledby theGroup. TheGroupcontrolsan investeewhen it isexposed,
or has rights, to variable returns from its involvement with the investee and has the ability to affect those
returns through its power over the investee.
In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less
any impairment losses.
