SINGAPORE WINDSOR HOLDINGS LIMITED
| Annual Report 2015
43
Year ended 31 March 2015
NOTES TO THE
FINANCIAL STATEMENTS
2.
Summary of significant accounting policies (cont’d)
Leases
Whether an arrangement is, or contains, a lease, it is based on the substance of the arrangement at the inception
date, that is, whether (a) fulfilment of the arrangement is dependent on the use of a specific asset or assets
(the asset); and (b) the arrangement conveys a right to use the asset. Leases are classified as finance leases
if substantially all the risks and rewards of ownership are transferred to the lessee. All other leases are classified
as operating leases. At the commencement of the lease term, a finance lease is recognised as an asset and as a
liability in the statement of financial position at amounts equal to the fair value of the leased asset or, if lower, the
present value of the minimum lease payments, each determined at the inception of the lease. The discount rate
used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease, if this
is practicable to determine, the lessee’s incremental borrowing rate is used. Any initial direct costs of the lessee are
added to the amount recognised as an asset. The excess of the lease payments over the recorded lease liability
are treated as finance charges which are allocated to each reporting year during the lease term so as to produce
a constant periodic rate of interest on the remaining balance of the liability. Contingent rents are charged as
expenses in the reporting years in which they are incurred. The assets are depreciated as owned depreciable assets.
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets
are classified as operating leases. For operating leases, lease payments are recognised as an expense in profit or
loss on a straight-line basis over the term of the relevant lease unless another systematic basis is representative
of the time pattern of the user’s benefit, even if the payments are not on that basis. Lease incentives received are
recognised in profit or loss as an integral part of the total lease expense. Rental income from operating leases is
recognised in profit or loss on a straight-line basis over the term of the relevant lease unless another systematic
basis is representative of the time pattern of the user’s benefit, even if the payments are not on that basis. Initial
direct cost incurred in negotiating and arranging an operating lease are added to the carrying amount of the
leased asset and recognised on a straight-line basis over the lease term.
Subsidiaries
A subsidiary is an entity including unincorporated and special purpose entity that is controlled by the reporting
entity and the reporting entity is exposed, 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. The existence and effect of
substantive potential voting rights that the reporting entity has the practical ability to exercise (that is, substantive
rights) are considered when assessing whether the reporting entity controls another entity.
In the reporting entity’s separate financial statements, an investment in a subsidiary is accounted for at cost less
any allowance for impairment in value. Impairment loss recognised in profit or loss for a subsidiary is reversed
only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last
impairment loss was recognised. The carrying value and the net book value of the investment in a subsidiary are not
necessarily indicative of the amount that would be realised in a current market exchange.
Non-controlling interests
The non-controlling interest is equity in a subsidiary not attributable, directly or indirectly, to the reporting entity
as the parent. The non-controlling interest is presented in the consolidated statement of financial position within
equity, separately from the equity of the owners of the parent. For each business combination, any non-controlling
interest in the acquiree (subsidiary) is initially measured either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s identifiable net assets. Where the non-controlling interest is measured
at fair value, the valuation techniques and key model inputs used are disclosed in the relevant Note. Profit or
loss and each component of other comprehensive income are attributed to the owners of the parent and to the
non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-
controlling interests even if this results in the non-controlling interests having a deficit balance.
