58 / 88
GB Auto and its subsidiaries (S.A.E.)
Notes to the consolidated financial statements For the financial Year ended December 31, 2014
(In the notes all amounts are shown in Thousand Egyptian Pounds unless otherwise stated)
(2) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation at balance sheet date exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in the income statement.
Foreign currency differences arising on the retranslation of monetary financial assets and liabilities in foreign currencies
designated as hedge of the variability of cash flows or hedge of net investments are presented in the translation reserve
within equity.
Changes in the fair value of monetary securities denominated in foreign currency classified as available-for-sale are ana-
lysed between translation differences resulting from changes in the amortised cost of the security, and other changes in
the carrying amount of the security. Translation differences related to changes in amortised cost are recognised in profit
or loss, and other changes in carrying amount are recognised in equity.
Translation differences on non-monetary financial assets and liabilities are reported as part of the fair value gain or loss.
Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit
or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary
financial assets such as equities classified as available-for-sale are included in the available-for-sale reserve in equity.
(3) Group companies
The results and financial position of all the Group entities that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
• Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that
balance sheet;
• Income and expenses for each income statement are translated at average exchange rates during the year
(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 rate on the dates of the transac-
tions); And all resulting exchange differences are recognised as a separate component of equity.
• The foreign currency exchange results arising from translation of the net investment in entities and loans or
financial instruments in foreign currencies allocated to cover these investments are recognized in the equity
on the consolidate financial statement. The foreign currencies exchange charged to the equity are recognized
as part of gain or loss upon the disposal of these investments.
D. Property, plant and equipment
Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Depreciation is calculated using the straight-line method to write off the cost of each asset to its residual values over the estimated
useful lives of assets excluding land, which is not depreciated. Estimated depreciation rates of assets are as follows:
Buildings
2% - 4%
Machinery & equipment
10% - 20%
Vehicles
20% - 25%
Fixtures & office furniture
6%
-
33%
The assets’ residual values and useful lives are reviewed, and adjusted yearly, if appropriate.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within
other gains (losses) – net, in the income statement.
Ghabbour Auto | 2014 ANNUAL REPORT
56