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Ascott Residence Trust
Annual Report 2015
3 Significant accounting policies
(continued)
3.1 Basis of consolidation
(continued)
(iii) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising
from transactions with associates are eliminated against the investment to the extent of the Group’s
interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only
to the extent that there is no evidence of impairment.
(iv) Accounting for subsidiaries and associate by the Trust
Investments in subsidiaries and associate are stated in the Trust’s statement of financial position at cost
less accumulated impairment losses.
3.2 Foreign currency
(i) Foreign currency transactions
Items included in the financial statements of each entity in the Group are measured using the currency
that best reflects the economic substance of the underlying events and circumstances relevant to that
entity (the “functional currency”).
Transactions in foreign currencies are translated to the respective functional currencies of Group entities
at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign
currencies at the reporting date are retranslated to the functional currency at the exchange rate at that
date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the
functional currency at the beginning of the year, adjusted for effective interest and payments during the
year, and the amortised cost in foreign currency translated at the exchange rate at the end of the year.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are
retranslated to the functional currency at the exchange rate at the date that the fair value was determined.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction.
Foreign currency differences arising on retranslation are recognised in the statement of total return,
except for differences arising on the retranslation of financial liabilities designated as a hedge of the net
investment in a foreign operation (see note 3.2 (iii)) or qualifying cash flow hedges to the extent the hedge
is effective, which are recognised in Unitholders’ funds.
