112 / 188
108
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L S TAT E M E N T S
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)
2.3 Summary of Significant Accounting Policies (Cont’d.)
(a) Basis of Consolidation (Cont’d.)
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.
If the business combination is achieved in stages, the acquisition date of the acquirer’s previously held equity
interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.