Integrated Reports Senwesbel Consolidated Financial Statements 2018 - Page 70

For assets and liabilities that are recognised in the financial statements on a recurring basis, the group determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. For the purpose of fair value disclosures, the group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. 2.2 FOREIGN CURRENCIES 2.2.1 Functional and presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the business operates (functional currency). The financial statements are presented in rand, which is the company’s and group’s functional and presentation currency. 2.2.2 Foreign transactions Transactions in foreign currencies are converted at spot rates applicable on the transaction dates. Monetary assets and/or liabilities in foreign currencies are converted to rand at spot rates applicable at the reporting date. Exchange differences arising on settlement or recovery of such transactions are recognised in profit or loss. 2.2.3 Foreign operations The results and financial position of all group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different to the company’s presentation currency, are translated into the presentation currency as follows: • Assets and liabilities at the closing exchange rate at the reporting date, • Income and expense items are translated at the average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates in which case income and expenses are translated at the dates of the transactions); and • All resulting exchange differences are recognised in other comprehensive income. On disposal of foreign operations, the component of other comprehensive income relating to that particular foreign operation is reclassified out of other comprehensive income. Goodwill and fair value adjustments arising from the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate at the reporting date. 69 SENWESBEL ANNUAL FINANCIAL STATEMENTS 2018 Senwesbel Limited Reg no: 1996/017629/06