Temasek has adopted new accounting standards in line with broader moves in Singapore.

New benchmarks known as the International Financial Reporting Standards have been in place here since last year, aimed at improving the quality of reports.

Temasek said in its annual report yesterday that year-on-year changes in the market value of all its sub-20 per cent investments are accounted as profits and losses in its income statements, even when no sale has occurred.

This is unlike before, when such changes in market value were captured in its balance sheet and had no impact on the reported profits or losses in its income statements.

"As sub-20 per cent investments comprise about 40 per cent of our portfolio, the adoption of the In-ternational Financial Reporting Standards will lead to material fluctuations in our reported profits or losses," said Temasek.

"Such market fluctuations do not reflect the potential gains or losses upon a sale."