Adopting International Accounting Standards
In 2018, Temasek adopted the International Financial Reporting Standards (IFRS), including IFRS 9: Financial Instruments, as part of Singapore’s IFRS convergence.
Adoption of IFRS 9 Financial Instruments
IFRS 9 applies to investments in which we hold less than 20% shareholding.
Before IFRS 9, our income statements recognised only realised gains or losses upon investment sale, where year-to-year market value changes for sub-20% investments were recorded on the balance sheet without affecting reported profits or losses in our income statements.
With IFRS 9, year-to-year market value changes for our sub-20% investments are now accounted as profits or losses in our income statements, even without a sale.
Sub-20% stakes comprise more than 40% of our portfolio. Thus, the adoption of IFRS 9 has led to material fluctuations in our income statements from annual paper gains or losses that do not reflect potential gains or losses upon a sale.
With IFRS 9, Temasek’s Group net profit now includes:
of Sub-20% Investments
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Unrealised Gains or Losses
Share price movements in the market can result in changes in value. These are also known as paper gains or losses, or mark to market gains or losses.
Sub-20% Investments
These are minority investments where we have less than 20% shareholding.
Impact on Temasek’s Group Financials
The solid blue line in the chart below provides the audited Group net profit, under the Singapore Financial Reporting Standards which does not include mark to market (MTM) gains or losses.
The dotted pink line provides the simulated Group net profit to include unrealised gains or losses of our sub-20% investments in a simple way.
The dark purple dots depict audited data from 2019 to 2025, including the unrealised gains or losses of our sub-20% investments as measured under the IFRS 9 accounting standard.
Group Net Profit/(Loss) (S$b)
with and without Unrealised Gains or Losses of Sub-20% Investments
(for year ended 31 March)
1 From the financial year ended 31 March 2019, IFRS 9 requires unrealised gains or losses of sub-20% investments to be included in the Group net profit.
Providing Additional Disclosures
We have provided additional disclosures of our performance without the impact of market fluctuations in our Group Financial Summary:
- Unrealised gains or losses of sub-20% investments; and
Group net profit, without unrealised gains or losses of sub-20% investments
No Impact on Other Measures
IFRS 9 does not impact the following:
As an investor, we aim to deliver sustainable returns over the long term. Hence, we focus on the performance of our portfolio over the longer time horizon, and the corresponding overall risk-adjusted cost of capital. We do not manage for year-to-year accounting profitability.
Adopting Accounting Standards Over the Years
Temasek adopts and complies with all applicable accounting standards in the preparation of group financials each year. The table below provides a snapshot of key accounting standards that we have adopted in our group financials since our inaugural issue of Temasek Review 2004: