2. Summary of significant accounting policies (cont’d)
2.30 Related parties (cont’d)
(b) An entity is related to the Group and the Company if any of the following conditions
applies: (cont’d)
(vi) The entity is controlled or jointly controlled by a person identified in (a).
(vii) A person identified in (a) (i) has significant influence over the entity or is
a member of the key management personnel of the entity (or of a parent of
the entity).
3. Significant accounting judgements and estimates
The preparation of the Group’s consolidated financial statements requires management
to make judgements, estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the
end of each reporting period. These are assessed on an on-going basis and are based on
experience and relevant factors, including expectations of future events that are believed
to be reasonable under the circumstances. However, uncertainty about these assumptions
and estimates could result in outcomes that require a material adjustment to the carrying
amount of the asset or liability affected in the future periods.
3.1 Judgements made in applying accounting policies
In the process of applying the Group’s accounting policies, management has made the
following judgements, which have the most significant effect on the amounts recognised
in the consolidated financial statements:
Determination of functional currency
The Group measures foreign currency transactions in the respective functional currencies
of the Company and its subsidiaries. In determining the functional currencies of the
entities in the Group, judgement is required to determine the currency that mainly
influences sales prices for goods and services and of the country whose competitive
forces and regulations mainly determines the sales prices of its goods and services. The
functional currencies of the entities in the Group are determined based on management’s
assessment of the economic environment in which the entities operate and the entities’
process of determining sales prices.
3.2 Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation
uncertainty at the end of each reporting period are discussed below. The Group based its
assumptions and estimates on parameters available when the financial statements were
prepared. Existing circumstances and assumptions about future developments, however,
may change due to market changes or circumstances arising beyond the control of the
Group. Such changes are reflected in the assumption when they occur.
NOTES TO THE FINANCIAL
STATEMENTS
For the financial year ended 30 June 2015
ASL Marine Holdings Ltd. /Annual Report 2015
102
