Illustrative Financial Statements - Deloitte

Illustrative Financial Statements 2017

GAAP Singapore Ltd and its subsidiaries

(Registration No. 200001999A)

Directors' statement and financial statements

Year ended December 31, 2017

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 is assumed to have presented its financial statements in accordance with Financial Reporting Standards in Singapore ("FRS") for a number of years.

Effective date

The illustrative financial statements include the disclosures required by the Singapore Companies Act, SGX-ST Listing Manual, and FRSs and INT FRSs that are issued at the date of publication (August 31, 2017).

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, and FRSs and INT FRSs.

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 FRSs 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, and FRSs and INT FRSs. 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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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 IFRS

INT FRS

LM

RAP Sch SSA

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

Summary of key changes from the 2016 version of the Illustrative Financial Statements

This section covers:

an overview of new and revised FRSs that are mandatorily effective for the year ending December 31, 2017; and

an overview of new and revised FRSs that are not yet mandatorily effective but allow early application for the year ending December 31, 2017.

For this purpose, the discussion below reflects a cut-off date of August 31, 2017. The potential impact of the application of any new and revised FRSs and INT FRSs issued after August 31, 2017 but before the financial statements are issued should also be considered and disclosed.

Note: Appendix A contains sample disclosures required by FRS 8.30 on new/revised FRSs, INT FRSs and amendments to FRSs that may be relevant to an entity that were issued but are not effective at the date of authorisation of the financial statements. The disclosures are purely for illustrative purposes and may not be relevant to GAAP Singapore Ltd for the year ended December 31, 2017.

Amendments mandatorily effective for the year ending December 31, 2017

The following is a summary of the new and revised FRSs that are mandatorily effective for the annual periods beginning on or after January 1, 2017.

Amendments to FRS 7 Statement of Cash Flows: Disclosure Initiative

Amendments to FRS 12 Income Taxes: Recognition of Deferred Tax Assets for Unrealised Losses

Amendments to FRS 112 Disclosure of Interests in Other Entities: Improvements to FRSs (December 2016)

Amendments to FRS 7 Statement of Cash Flows: Disclosure Initiative

The amendments require an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. The amendments apply prospectively. Entities are not required to present comparative information for earlier periods when they first apply the amendments.

Amendments to FRS 12 Income Taxes: Recognition of Deferred Tax Assets for Unrealised Losses

The amendments clarify that unrealised losses on debt instruments measured at fair value in the financial statements but at cost for tax purposes can give rise to deductible temporary differences. The amendments also clarify that the carrying amount of an asset does not limit the estimation of probable future taxable profits, and that when comparing deductible temporary differences with future taxable profits, the future taxable profits excludes tax deductions resulting from the reversal of those deductible temporary differences. The amendments apply retrospectively, with certain transition relief.

Amendments to FRS 112 Disclosures of Interests in Other Entities: Improvements to FRSs (December 2016)

The amendments clarify the scope of FRS 112 by specifying that disclosure requirements in the Standard, except for those in paragraphs B10-B16 (on summarised financial information), apply to any interests that are classified as held for sale, held for distribution to owners or discounted operations in accordance with FRS 105 Non-current Assets Held for Sale and Discontinued Operations. The amendments apply retrospectively.

Illustrative Financial Statements 2017

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Summary of key changes from the 2016 version of the Illustrative Financial Statements

Not yet mandatorily effective but early application allowed for the year ending December 31, 2017 The following is a summary of the new and revised FRSs that are not yet mandatorily effective for the year ending December 31, 2017 but early application is allowed. FRS 109 Financial Instruments FRS 115 Revenue from Contracts with Customers

(with clarifications issued) FRS 116 Leases Amendments to FRS 110 Consolidated Financial

Statements and FRS 28 Investments in Associates and Joint Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Amendments to FRS 102 Share-based Payment: Classification and Measurement of Share-based Payment Transactions Amendments to FRS 40 Investment Property: Transfers of Investment Property Amendments to FRS 104 Insurance Contracts: Applying FRS 109 Financial Instruments with FRS 104 Insurance Contracts Improvements to FRSs (December 2016) INT FRS 122 Foreign Currency Transactions and Advance Consideration Guidance notes See Appendix A for the illustrative disclosures on the effects of the above new FRSs, INT FRSs and amendments to FRS that are issued but not effective at the date of authorisation of financial statements. The list is updated up to August 31, 2017.

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Content

Directors' statement Independent auditor's report Statements of financial position Consolidated statement of profit or loss and other comprehensive income

Alt 1 ? Consolidated statement of profit or loss and other comprehensive income Alt 2 ? Consolidated statement of profit or loss Alt 2 ? Consolidated statement of profit or loss and other comprehensive income Statements of changes in equity Consolidated statement of cash flows Alt 1 ? Direct method of reporting cash flows from operating activities Alt 2 ? Indirect method of reporting cash flows from operating activities Notes to financial statements Appendices to illustrative financial statements Appendix A ? Guidance on financial statements disclosures: Sample disclosures on FRSs in issue at date of authorisation of the financial statements but not yet effective

1 9 16

22 26 28 34

38 40 44

225

Index to the notes to financial statements

1. General

044

2. Summary of significant accounting policies

045

3. Critical accounting judgements and key sources of estimation uncertainty

077

4. Financial instruments, financial risks and capital management

081

5. Holding company and related company transactions

108

6. Other related party transactions

110

7. Cash and cash equivalents

115

8. Trade and other receivables

116

9. Construction contracts

120

10. Finance lease receivables

121

11. Held for trading investments

122

12. Held-to-maturity financial assets (current)

123

13. Derivative financial instruments

124

14. Inventories

128

15. Assets classified as held for sale

129

16. Property, plant and equipment

130

17. Investment property

135

18. Goodwill

139

19. Other intangible assets

141

20. Subsidiaries

142

21. Associates

149

22. Joint venture

155

23. Available-for-sale investments

159

24. Other financial assets at fair value through profit or loss

160

25. Held-to-maturity financial assets (non-current)

160

26. Deferred tax

161

27. Bank overdrafts and loans

165

28. Trade and other payables

167

29. Finance leases

169

30. Provisions

170

31. Convertible loan notes

172

32. Retirement benefit obligations

173

33. Share-based payments

180

Index to the notes to financial statements

34. Share capital

183

35. Treasury shares

184

36. Capital reserves

184

37. Revaluation reserves

185

38. Hedging and translation reserves

186

39. Components of other comprehensive income

187

40. Revenue

188

41. Segment information

189

42. Investment revenue

196

43. Other gains and losses

197

44. Finance costs

198

45. Income tax expense

199

46. Discontinued operation

203

47. Profit for the year

204

48. Dividends

208

49. Earnings per share

208

50. Disposal of subsidiary

212

51. Acquisition of subsidiary

214

52. Non-cash transactions

221

53. Contingent liabilities

221

54. Commitments

222

55. Operating lease arrangements

222

56. Events after the reporting period

224

57. Reclassifications and comparative figures

224

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