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FIMA CORPORATION BERHAD
(21185-P) |
Annual Report
2016
NOTES TO THE FINANCIAL
STATEMENTS 31 MARCH 2016
(contd.)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONTD.)
2.3 Summary of Significant Accounting Policies (Contd.)
(a) Basis of Consolidation (Contd.)
Subsidiary companies are consolidated when the Company obtains control over the subsidiary
company and ceases when the Company loses control of the subsidiary company. All intra-group
balances, income and expenses and unrealised gains and losses resulting from intra-group
transactions are eliminated in full.
Losses within a subsidiary company are attributed to the non-controlling interests even if that
results in a deficit balance.
Changes in the Group’s ownership interests in subsidiary companies that do not result in the Group
losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts
of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in
their relative interests in the subsidiary company. The resulting difference is recognised directly in
equity and attributed to owners of the Company.
When the Group loses control of a subsidiary company, a gain or loss calculated as the difference
between (i) the aggregate of the fair value of the consideration received and the fair value of
any retained interest and (ii) the previous carrying amount of the assets and liabilities of the
subsidiary company and any non-controlling interest, is recognised in profit or loss. The subsidiary
company’s cumulative gain or loss which has been recognised in other comprehensive income
and accumulated in equity are reclassified to profit or loss or where applicable, transferred directly
to retained earnings. The fair value of any investment retained in the former subsidiary company
at the date control is lost is regarded as the cost on initial recognition of the investment.
Business Combinations
Acquisitions of subsidiaries are accounted for using the acquisition method. The cost of an
acquisition is measured as the aggregate of the consideration transferred, measured at acquisition
date fair value and the amount of any non-controlling interests in the acquiree. The Group elects
on a transaction-by-transaction basis whether to measure the non-controlling interests in the
acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets.
Transaction costs incurred are expensed and included in administrative expenses.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value
at the acquisition date. Subsequent changes in the fair value of the contingent consideration
which is deemed to be an asset or liability, will be recognised in accordance with FRS 139 either
in profit or loss or as a change to other comprehensive income. If the contingent consideration
is classified as equity, it will not be remeasured. Subsequent settlement is accounted for within
equity. In instances where the contingent consideration does not fall within the scope of FRS 139,
it is measured in accordance with the appropriate FRS.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition date. This includes the separation of
embedded derivatives in host contracts by the acquiree
.