Illustrative Financial Statements

Illustrative Financial Statements 2018

GAAP Singapore Ltd and its subsidiaries

(Registration No. 200001999A)

Directors' statement and financial statements

Year ended December 31, 2018

Preface

Scope

This publication provides a set of sample financial statements of a fictitious group of companies. GAAP Singapore Ltd is a company incorporated in Singapore and its shares are listed on the Main Board of the Singapore Exchange Securities Trading Limited ("SGX-ST"). The names of people and entities included in this publication are fictitious. Any resemblance to a person or entity is purely coincidental.

GAAP Singapore Ltd presented its consolidated financial statements in accordance with Financial Reporting Standards in Singapore ("FRS") for a number of years up to and including December 31, 2017.

In December 2017, the Accounting Standards Council (ASC) issued a new financial reporting framework Singapore Financial Reporting Standards (International) ("SFRS(I)"), which is to be adopted by GAAP Singapore Ltd, for annual periods beginning on or after January 1, 2018. SFRS(I) is identical to the International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (IASB).

GAAP Singapore Ltd applied SFRS(I) 1 First-time Adoption of Singapore Financial Reporting Standards (International) in its first set of SFRS(I) financial statements for financial year ending December 31, 2018.

Effective date

The illustrative financial statements include the disclosures required by the Singapore Companies Act, SGX-ST Listing Manual, and SFRS(I)s and SFRS(I) Interpretations ("SFRS(I) INTs") that are issued at the date of publication (September 30, 2018).

Standards issued, but not yet effective, as at December 31, 2018 have not been early adopted in these illustrative financial statements.

Illustrative in nature

The sample disclosures in this set of illustrative financial statements should not be considered to be the only acceptable form of presentation. The form and content of each reporting entity's financial statements are the responsibility of the entity's directors and management, and other forms of presentation which are equally acceptable may be preferred and adopted, provided they include the specific disclosures prescribed in the Singapore Companies Act, SGX-ST Listing Manual, SFRS(I)s and SFRS(I) INTs.

For the purposes of presenting the statement of profit or loss and other comprehensive income, and statement of cash flows, the various alternatives allowed under SFRS(I)s for those statements have been illustrated. Preparers of financial statements should select the alternatives most appropriate to their circumstances.

The illustrative financial statements contain general information and are not intended to be a substitute for reading the legislation or accounting standards themselves, or for professional judgement as to adequacy of disclosures and fairness of presentation. They do not encompass all possible disclosures required by the Singapore Companies Act, SGX-ST Listing Manual, SFRS(I)s and SFRS(I) INTs. Depending on the circumstances, further specific information may be required in order to ensure fair presentation and compliance with laws and accounting standards and securities exchange regulations in Singapore.

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Preface

Guidance notes

Direct references to the source of disclosure requirements are included in the reference column on each page of the illustrative financial statements. Guidance notes are provided where additional matters may need to be considered in relation to a particular disclosure. These notes are inserted within the relevant section or note.

The illustrative financial statements are prepared by the Professional Practice Department of Deloitte & Touche LLP in Singapore ("Deloitte Singapore") for the use of clients and staff and are written in general terms. Accordingly, we recommend that readers seek appropriate professional advice regarding the application of its contents to their specific situations and circumstances. The illustrative financial statements should not be relied on as a substitute for such professional advice. Partners and professional staff of Deloitte Singapore would be pleased to advise you. While all reasonable care has been taken in the preparation of these illustrative financial statements, Deloitte Singapore accepts no responsibility for any errors it might contain, whether caused by negligence or otherwise, or for any loss, howsoever caused, incurred by any person as a result of relying on it.

Abbreviations used

References are made in this publication to the Singapore Companies Act, Singapore accounting pronouncements, guidelines and SGX-ST listing rules that require a particular disclosure or accounting treatment. The abbreviations used to identify the source of authority are as follows:

Alt App CA CCG FRS

IAS IFRIC

IFRS

INT FRS

LM

RAP Sch SFRS(I)

SFRS(I) INT

SSA

Alternative Appendix Singapore Companies Act Code of Corporate Governance Financial Reporting Standards in Singapore International Accounting Standards Interpretation of International Financial Reporting Standards International Financial Reporting Standards Interpretation of Financial Reporting Standards Singapore Exchange Securities Trading (SGX-ST) Listing Manual Recommended Accounting Practice Schedule Singapore Financial Reporting Standards (International) Interpretation of Singapore Financial Reporting Standards (International) Singapore Standards on Auditing

Illustrative Financial Statements 2018

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Summary of key changes from the 2017 version of the Illustrative Financial Statements

On January, 1, 2018, GAAP Singapore Ltd group adopted the new SFRS(I) framework for the first time for financial year ending December 31, 2018 and SFRS(I) 1 First-time Adoption of Singapore Financial Reporting Standards (International) is applied in its first set of SFRS(I) financial statements. As a first-time adopter, GAAP Singapore Ltd group is required to apply retrospectively, accounting policies based on each SFRS(I) effective as at end of the first SFRS(I) reporting period (December 31, 2018), except for areas of exceptions and optional exemptions set out in SFRS(I) 1. In the first set of SFRS(I) financial statements for the financial year ending December 31, 2018, an additional opening statement of financial position as at date of transition (January 1, 2017) is presented, together with related notes. Reconciliation statements from previously reported FRS amounts and explanatory notes on transition adjustments are required for equity as at date of transition (January 1, 2017) and as at end of last financial period under FRS (December 31, 2017), and for total comprehensive income and cash flows reported for the last financial period under FRS (for the year ended December 31, 2017). Additional disclosures may also be required for specific transition adjustments if applicable. These illustrative financial statements assume there is no change to the group's and the company's previous accounting policies under FRS or material adjustments on the initial transition to the new framework, other than those arising from the application of SFRS(I) 9 and SFRS(I) 15 which are effective at the same time. GAAP Singapore Ltd has elected to apply certain exemptions allowed under SFRS(I) 1. Details of first-time adoption of SFRS(I) are included in Note 58. Note: A first-time adopter of SFRS(I) does not apply the SFRS(I) 1-8 Accounting Policies, Changes in Accounting Estimate and Errors requirements to changes in accounting policies that occur when an entity first adopts SFRS(I). The following is the list of SFRS(I)s which are identical to the new and revised IFRS pronouncements issued by the IASB that are mandatorily effective for the annual period beginning on or after January 1, 2018. SFRS(I) 1-28 Investments in Associates and Joint Ventures: Measuring investees at fair value through profit or

loss on an investment-by-investment basis SFRS(I) 1-40 Investment Property: Transfers of Investment Property SFRS(I) 2 Share-based Payment: Classification and Measurement of Share-based Payment Transactions SFRS(I) 4 Insurance Contracts: Applying SFRS(I) 9 Financial Instruments with SFRS(I) 4 Insurance Contracts SFRS(I) 9 Financial Instruments SFRS(I) 15 Revenue from Contracts with Customers SFRS(I) INT 22 Foreign Currency Transactions and Advance Consideration These illustrative financial statements assume there is no impact to the accounting policies, presentation and disclosures arising from the implementation of the above SFRS(I)s other than SFRS(I) 9 and SFRS(I) 15. GAAP Singapore Ltd group has not elected the exemptions under SFRS(I) 1 which are available for SFRS(I) 9 and SFRS(I) 15. Accordingly, the new requirements under SFRS(I) 9 and SFRS(I) 15 are applied retrospectively.

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Summary of key changes from the 2017 version of the Illustrative Financial Statements

Application of SFRS(I) 9

The accounting policies under SFRS(I) 9 are illustrated in Note 2.4.

Reclassification of financial assets and financial liabilities into the SFRS(I) 9 categories has had no overall impact

on their respective measurement bases. The only impact relates to the presentation of fair value changes on

equity investments classified as fair value through other comprehensive income (FVTOCI) as `amounts that will

not be subsequently reclassified to profit or loss' whereas under FRS 39 they would be subsequently reclassified

to profit or loss.

Additional loss allowance is recognised for financial assets and other items within the impairment scope of

SFRS(I) 9. Comparative figures have been restated accordingly. Enhanced disclosures have been made with

respect to the overview of the group's exposure to credit risk and credit risk management. Refer to Notes

4(c)(iv), 4(c)(v), 8, 9, 11, 13 and 25 for further details.

All existing hedging relationships are assumed to qualify as continuing hedging relationships and continue to

be effective.

The impact of SFRS(I) 9 on GAAP Singapore Ltd group is disclosed in Note 58.

Application of SFRS(I) 15

The accounting policies under SFRS(I) 15 are illustrated in Note 2.18.

These illustrative financial statements include various amendments as a result of SFRS(I) 15 which are

immaterial to users of the financial statements. In practice, entities may not want to restate for such

amendments. However, they are included in these illustrative financial statements in order to illustrate how

such amendments would be presented and also to highlight the potential impact on the financial statements of

the application of SFRS(I) 15. The impact of SFRS(I) 15 on GAAP Singapore Ltd group is disclosed in Note 58.

As a result of the adoption of SFRS(I) 15, the disclosures previously required under FRS 11 Construction

Contracts included in Note 9 Amounts due from (to) contract customers in the 2017 Disclosures are no longer

required. The balance previously included as an amount due from contract customers in Note 9 has been

reclassified as a contract asset and Note 9 now contains the disclosures around contract asset balances that

are required by SFRS(I) 15. The previous balance "amount due to contract customers" has been reclassified as

a contract liability balance within a new contract liability note, Note 29. Contract costs has also been added in

Note 10 to disclose costs to obtain construction contracts that meet the criteria for capitalisation in SFRS(I) 15,

and which were previously expensed. A refund liability relating to customers' right to return products has been

recognised and included in Note 30. Consequently, a right to returned goods asset representing the group's

right to recover products from customers where customers exercise their right of return has also been

recognised and included in Note 16.

SFRS(I) 15.118 contains a requirement to explain the significant changes in the contract asset and contract

liability balances during the reporting period. While there is no significant movement on these balances in the

context of the illustrative financial statements, a guidance note has been included on this requirement.

Contract asset arising from the application of SFRS(I) 15 is assessed for impairment in accordance with SFRS(I)

9. The impairment of contract asset is measured, presented and disclosed on the same basis as a financial

asset that is within the scope of SFRS(I) 9.

Enhanced disclosures have been made with respect to the disaggregation of the group's revenue. Refer to Note

42 for further details.

Illustrative Financial Statements 2018

iv

Summary of key changes from the 2017 version of the Illustrative Financial Statements

Guidance notes

1. Discussions about the application of SFRS(I) 9 and SFRS(I) 15 are ongoing. Market practice has yet to be developed and will no doubt evolve over time. Depending on the specific facts and circumstances of each entity, the nature and extent of the disclosures will vary from those presented in these illustrative financial statements, which were created based on a set of presumed facts applicable to GAAP Singapore Ltd group for illustrative purposes.

2. SFRS(I) 1.E1 provides exemption from the requirement to restate comparative information for SFRS(I) 9 (including disclosures in SFRS(I) 7 Financial Instruments: Disclosures, to the extent that the disclosures relate to SFRS(I) 9) in the first set of SFRS(I) financial statements.

If an entity chooses to apply the exemption and hence does not restate comparative information in the year of the initial application, the following points are relevant:

Comparative information for prior periods will not be restated. The classification and measurement

requirements previously applied in accordance with FRS 39 and disclosures made in accordance with

FRS 107 will be retained.

The entity should disclose accounting policies for both periods: one applying SFRS(I) 9 (current period)

and another for applying FRS 39 (prior periods).

Any difference between the previous carrying amounts and the carrying amounts at the beginning of

the annual reporting period that includes the date of initial application will be recognised in the opening

retained earnings (or other component of equity, as appropriate).

The statement of financial position as at the beginning of the earliest comparative period would not be

restated for the effects of SFRS(I) 9.

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Content

Directors' statement

1

Independent auditor's report

8

Statements of financial position

17

Consolidated statement of profit or loss and other comprehensive income

Alt 1 ? Consolidated statement of profit or loss and other comprehensive income

23

Alt 2 ? Consolidated statement of profit or loss

27

Alt 2 ? Consolidated statement of profit or loss and other comprehensive income

29

Statements of changes in equity

34

Consolidated statement of cash flows

Alt 1 ? Direct method of reporting cash flows from operating activities

37

Alt 2 ? Indirect method of reporting cash flows from operating activities

39

Notes to financial statements

42

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