My first Publication ocbc_ar17_fullreport_english | Page 168

NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2017
These notes form an integral part of the financial statements.
The Board of Directors of Oversea-Chinese Banking Corporation
Limited authorised these financial statements for issue on
13 February 2018.
1. GENERAL
Oversea-Chinese Banking Corporation Limited (“the Bank”) is
incorporated and domiciled in Singapore and is listed on the
Singapore Exchange Securities Trading Limited. The address of
the Bank’s registered office is 63 Chulia Street, #10-00 OCBC
Centre East, Singapore 049514.
The consolidated financial statements relate to the Bank and its
subsidiaries (together referred to as the Group) and the Group’s
interests in associates. The Group is principally engaged in the
business of banking, life assurance, general insurance, asset
management, investment holding, futures and stockbroking.
2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
2.1
BASIS OF PREPARATION
The financial statements have been prepared in accordance
with Singapore Financial Reporting Standards (“FRS”) as required
by the Singapore Companies Act (the “Act”) including the
modification to FRS 39 Financial Instruments: Recognition and
Measurement requirement on loan loss provisioning under Notice
to Banks No. 612 Credit Files, Grading and Provisioning issued by
the Monetary Authority of Singapore (“MAS”).
The financial statements are presented in Singapore Dollar,
rounded to the nearest thousand unless otherwise stated. The
financial statements have been prepared under the historical cost
convention, except as disclosed in the accounting policies below.
The preparation of financial statements in conformity with
FRS requires management to exercise its judgement, use
estimates and make assumptions in the application of
accounting policies on the reported amounts of assets,
liabilities, revenues and expenses. Although these estimates
are based on management’s best knowledge of current events
and actions, actual results may ultimately differ from these
estimates. Critical accounting estimates and assumptions
used that are significant to the financial statements, and
areas involving a high degree of judgement or complexity,
are disclosed in Note 2.24.
The following revised financial reporting standards and
interpretations were applied with effect from 1 January 2017:
FRS
FRS 7 (Amendments)
FRS 12 (Amendments)
Various
166
Title
Statement of Cash Flows:
Disclosure Initiatives
Income Taxes: Recognition of Deferred
Tax Assets for Unrealised Losses
Improvements to FRSs (December 2016)
OCBC ANNUAL REPORT 2017
The initial application of the above standards (including their
consequential amendments) and interpretations did not have
any material impact on the Group’s financial statements.
2.2
BASIS OF CONSOLIDATION
2.2.1 Subsidiaries
Subsidiaries are entities over which the Group controls when it is
exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns
through its power over the entity.
Subsidiaries are consolidated from the date when control is
transferred to the Group and cease to be consolidated on the
date when that control ceases. The Group reassesses whether
it controls an investee if facts and circumstances indicate that
there have been changes to its power, its rights to variable
returns or its ability to use its power to affect its returns.
In preparing the consolidated financial statements, intra-group
transactions and balances, together with unrealised income and
expenses arising from the intra-group transactions among group
companies are eliminated. Unrealised losses are also eliminated
unless the transaction provides evidence of an impairment of
the asset transferred. Where necessary, adjustments are made to
the financial statements of subsidiaries to ensure consistency of
accounting policies within the Group.
Non-controlling interests (“NCI”) represent the equity
in subsidiaries not attributable, directly or indirectly, to
shareholders of the Bank, and are presented separately from
equity attributable to equity holders of the Bank. For NCI that
arise through minority unit holders’ interest in the insurance
subsidiaries of Great Eastern Holdings Limited (“GEH”)
consolidated investment funds, they are recognised as a liability.
These interests qualify as a financial liability as they give the
holder the right to put the instrument back to the issuer for
cash. Changes in these liabilities are recognised in the income
statement as expenses.
The Group applies the acquisition method to account for
business combinations. The cost of an acquisition is measured
at the fair value of the assets given, equity instruments issued
or liabilities incurred or assumed at the date of exchange.
Acquisition-related costs are expensed as incurred. Identifiable
assets acquired and liabilities and contingent liabilities assumed
in a business combination are measured initially at their fair
values at the acquisition date. The Group recognises any NCI
either at fair value or at the NCI’s proportionate share of the
recognised amounts of the acquiree’s identifiable net assets at
the date of acquisition on an acquisition-by-acquisition basis.
The excess of the fair value of consideration transferred,
the recognised amount of any NCI in the acquiree and the
acquisition-date fair values of any previously held equity interest
in the acquiree over the fair value of the identifiable net assets
acquired is recognised as goodwill at the date of acquisition.
When the excess is negative, a bargain purchase gain is
recognised immediately in the income statements.