Consolidated Financial Statements
considered to be a “Completed Voyage” when a vessel has sailed from the last discharging port of a voyage. Freight revenues, direct and indirect operating expenses associated with incomplete voyages are deferred until completion of voyage. Incomplete voyages are shown at net amount in the consolidated balance sheet under “Incomplete Voyages”. Revenues from chartering and other associated activities are recorded when services are rendered and are recorded in conformity with contract periods, voyages durations, and agreed upon services. Other income is recorded when earned. n- Bunker subsidy Bunker subsidy is computed on bunker quantities purchased and recorded in the consolidated income statement on purchase. Provisions are made against any amounts that might not be collectable. o- Expenses Direct and indirect operating costs are classified as operating expenses and all other expenses are classified as general and administrative expenses. p- Borrowing costs Borrowings are recognized at the proceeds received, net of transactions costs incurred. Borrowing costs that are directly attributable to the acquisition, construction and production of qualifying assets are capitalized as part of those assets. Other borrowing costs are charged to the consolidated income statement. q- Foreign currency transactions Foreign currency transactions are translated into Saudi riyal at prevailing exchange rates on transaction date. Monetary assets and liabilities in foreign currencies at balance sheet date are translated into Saudi riyal at the prevailing exchange rates on that date. Gains and losses resulting from fluctuation of exchange rates, which were not significant for 2010 and 2009, are recognized in the consolidated income statement. Assets and liabilities of the consolidated subsidiaries denominated in foreign currencies are converted into Saudi riyal at exchange rates prevailing at the consolidated balance sheet date. Revenues and expenses of the consolidated subsidiaries denominated in foreign currencies are converted into Saudi riyal at average exchange rates during the period. Also the components of shareholders’ equity excluding retained earnings (deficit) are converted applying the exchange rate prevailing at the dates the related items originated.
Exchange differences arising from such conversion, if material, are included in a separate line item under shareholders’ equity.
The National Shipping Company of Saudi Arabia Annual Report 2010
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