NOTES TO THE CONSOLIDATED FINANCIAL  STATEMENTS  (RMB AND US$ AMOUNTS EXPRESSED IN THOUSANDS, EXCEPT PER SHARE DATA)  2.  Basis of preparation and accounting policies (cont’d) (e)  Foreign currency translation (cont’d) Transactions and balances (cont’d) Group companies (f)  Revenue recognition 2.3  Summary of significant accounting policies (cont’d) Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the  exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign  currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss  arising on translation of non-monetary items measured at fair value is treated in line with the recognition of  gain or loss on change in fair value of the item (i.e., translation differences on items whose fair value gain or loss  is recognized in OCI or profit or loss are also recognized in OCI or profit or loss, respectively). Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying  amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign  operation and translated at the spot rate of exchange at the reporting date. For consolidation purpose, the assets and liabilities of foreign operations are translated into Rmb at the rate of  exchange prevailing at the reporting date and their statements of profit or loss are translated at exchange rates  prevailing at the dates of the transactions. The exchange differences arising on translation for consolidation are  recognized in OCI. On disposal of a foreign operation, the component of OCI relating to that particular foreign  operation is recognized in profit or loss. For the US Dollar convenience translation amounts included in the accompanying consolidated financial  statements, the Rmb equivalent amounts have been translated into US Dollar at the rate of Rmb 6.1201 =  US$1.00, the rate quoted by the People’s Bank of China (“PBOC”) at the close of business on March 7, 2014. No  representation is made that the Rmb amounts could have been, or could be, converted into US Dollar at that  rate or at any other rate prevailing on March 7, 2014 or any other date. Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and  the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured  at the fair value of the consideration received or receivable, taking into account contractually defined terms of  payment and excluding discounts, rebates, taxes or duty. The Group has concluded that it is the principal in all  of its revenue arrangements since it is the primary obligor in all the revenue arrangements, has pricing latitude  and is also exposed to inventory and credit risks. China Yuchai International Limited | Annual Report 2013 43