MISC BERHAD - Annual Report 2014 p 186 2. Significant accounting policies (cont’d.) 2.3 Summary of significant accounting policies (cont’d.) (u) Foreign currencies (cont’d.) (iii) Foreign operations (cont’d.) - All resulting exchange differences are taken to the currency translation reserve within other comprehensive income. Goodwill and fair value adjustments arising from the acquisition of foreign operations on or after 1 April 2006 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations, translated at the closing rate at the reporting date. Goodwill and fair value adjustments which arose on the acquisition of foreign subsidiaries before 1 April 2006 are deemed to be assets and liabilities of the parent company and are recorded in RM at the rates prevailing at the date of acquisition. (v) Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: (i) Freight income Freight receivable and the relevant discharge costs of cargoes loaded onto ships up to the reporting date are accrued for in the financial statements, using the percentage of completion method. (ii) Charter income The results of ships employed on voyage charter and that of other services rendered are accounted for on a time accrual basis. Certain charter income is recognised on a straight-line basis over the firm period of the contract. (iii) Lightering income Income from lightering charges is recognised on percentage of completion of voyages, calculated on a discharge-to-discharge basis. The voyage revenue is recognised evenly over the period from a ship’s departure from its previous discharge point to its projected departure from its next discharge point. NOTESTOTHE FINANCIAL STATEMENTS - 31 December 2014
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