Cellmid 2018 Annual Report
52
NOTES TO THE
FINANCIAL STATEMENTS
CONTINUED
(a) Share-based payments reserve
The fair value of options granted is recognised as a benefit expense with a corresponding increase in equity. The fair value is
measured at grant date and recognised over the period during which the directors and executives become unconditionally
entitled to the options.
The fair value at grant date is determined using the Black-Scholes option pricing model that takes into account the exercise
price, the term of option, the impact of dilution, the share price at grant date and expected price volatility of the underlying
share, the expected dividend yield and the risk free interest rate for the term of the option.
The fair value of the options granted is adjusted to reflect market vesting conditions, but excludes the impact of any non-
market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are
expected to become exercisable. The benefit expense recognised each period takes into account the most recent estimate.
Upon the exercise of options, the balance of the share-based payments reserve relating to those options is transferred to share
capital and the proceeds received, net of any directly attributable transaction costs, and are credited to share capital.
(b) General reserve
The movement in the reserve is as a result of the recognition of the equity component of the convertible loan.
(c) Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entity are recognised in other comprehensive income
through the foreign currency translation reserve. The cumulative amount is reclassified to profit or loss when the net investment
is disposed.
20. FUNCTIONAL AND PRESENTATION CURRENCY
Accounting Policy
The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and
presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars 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
financial year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit
or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting
date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange
rates, which approximate the rate at the date of the transaction, for the period. All resulting foreign exchange differences are
recognised in other comprehensive income through the foreign currency translation reserve.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed.