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Ascott Residence Trust
Annual Report 2015
3 Significant accounting policies
(continued)
3.2 Foreign currency
(continued)
(ii) Foreign operations
The assets and liabilities of foreign operations are translated to Singapore dollars at exchange rates at
the reporting date. The income and expenses of foreign operations are translated to Singapore dollars
at exchange rates at the dates of the transactions. Fair value adjustments arising on the acquisition of
a foreign operation are treated as assets and liabilities of the foreign operation and translated at the
closing rate at reporting date.
Foreign currency differences are recognised in Unitholders’ funds. However, if the operation is a
non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is
allocated to the non-controlling interests. When a foreign operation is disposed of, such that control,
significant influence or joint control is lost, the cumulative amount in the foreign currency translation
reserve is transferred to total return as part of the profit or loss on disposal. When the Group disposes
of only part of its interest in a subsidiary that includes a foreign operation while retaining control,
the relevant proportion of the cumulative amount is reattributed to non-controlling interests.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned
nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary
item are considered to form part of a net investment in a foreign operation. These are recognised in
Unitholders’ funds, and are presented in the foreign currency translation reserve.
(iii) Hedge of a net investment in foreign operation
The Group applies hedge accounting to foreign currency differences arising between the functional
currency of the foreign operation and the Trust’s functional currency (Singapore dollars), regardless of
whether the net investment is held directly or through an intermediate parent.
Foreign currency differences arising on the retranslation of a financial liability designated as a hedge of a
net investment in a foreign operation are recognised in Unitholders’ funds to the extent that the hedge
is effective, and are presented within equity in the foreign currency translation reserve. To the extent
that the hedge is ineffective, such differences are recognised in the statement of total return. When the
hedged net investment is disposed of, the relevant amount in the foreign currency translation reserve is
transferred to the statement of total return as part of the profit or loss on disposal.
3.3 Serviced residence properties
Serviced residence properties comprise serviced residences, rental housing properties and other hospitality
assets. Serviced residence properties are accounted for as non-current assets and are stated at initial cost
on acquisition and at fair value thereafter. The cost of a purchased property comprises its purchase price and
any directly attributable expenditure. Transaction costs are included in the initial measurement. Fair value is
determined in accordance with the Trust Deed, which requires the serviced residence properties to be valued
by independent registered valuers in the following events:
• at least once in each period of 12 months following the acquisition of each parcel of real estate property;
and
• for acquisition and disposal of real estate property as required by the CIS Code issued by MAS.
Notes to the Financial Statements
Year ended 31 December 2015
