Excel Force MSC Berhad Annual Report 2016

EXCEL FORCE MSC BERHAD ANNUAL REPORT 2016 68 Notes to the Financial Statements 31 December 2016 (cont’d) 4. SIGNIFICANT ACCOUNTING POLICIES (cont’d) 4.18 Foreign currencies (cont’d) (b) Foreign currency transactions and balances Transactions in foreign currencies are converted into functional currency at rates of exchange ruling at the transaction dates. Monetary assets and liabilities in foreign currencies at the end of each reporting period are translated into functional currency at rates of exchange ruling at that date. All exchange differences arising from the settlement of foreign currency transactions and from the translation of foreign currency monetary assets and liabilities are included in profit or loss in the period in which they arise. Non-monetary items initially denominated in foreign currencies, which are carried at historical cost, are translated using the historical rate as of the date of acquisition, and non-monetary items, which are carried at fair value are translated using the exchange rate that existed when the values were determined for presentation currency purposes. 4.19 Revenue recognition Revenue is measured at the fair value of the consideration received or receivable net of discounts and rebates. Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction would flow to the Group, and the amount of revenue and the cost incurred or to be incurred in respect of the transaction can be reliably measured and specific recognition criteria have been met for each of the activities of the Group as follows: (a) Sale of goods Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods have been transferred to the customer and where the Group retains no continuing managerial involvement over the goods, which coincides with the delivery of goods and services, and acceptance by customers. (b) Services Revenue from rendering of services is recognised upon performance of services. (c) Interest income Interest income is recognised as it accrues, using the effective interest method. (d) Rental income Rental income is accounted for on a straight line basis over the lease term of an ongoing lease. (e) Management fees Management fees are recognised when services are rendered. 4.20 Operating segments Operating segments are defined as components of the Group that: (a) Engage in business activities from which it could earn revenue and incur expenses (including revenue and expenses relating to transactions with other components of the Group); (b) Whose operating results are regularly reviewed by the chief operating decision maker of the Group in making decisions about resources to be allocated to the segment and assessing its performance; and (c) For which discrete financial information is available.