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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.)
(d) Investment in Associate Companies
An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. An
associate is equity accounted for from the date the Group obtains significant influence until the date the Group
ceases to have significant influence over the associate.
The Group’s investment in associate are accounted for using the equity method. Under the equity method, the
investment in associate is measured in the statement of financial position at cost plus post-acquisition changes in
the Group’s share of net assets of the associate. Goodwill relating to associate is included in the carrying amount
of the investment. Any excess of the Group’s share of the net fair value of the associate’s identifiable assets,
liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the
investment and is instead included as income in the determination of the Group’s share of the associate’s profit or
loss for the period in which the investment is acquired.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does
not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.
After application of the equity method, the Group determines whether it is necessary to recognise an additional
impairment loss on the Group’s investment in its associates. The Group determines at each reporting date whether
there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group
calculates the amount of impairment as the difference between the recoverable amount of the associate and its
carrying value and recognises the amount in profit or loss.
The financial statements of the associate are prepared as of the same reporting date as the Company. Where
necessary, adjustments are made to bring the accounting policies in line with those of the Group.
In the Company’s separate financial statements, investments in associate are stated at cost less impairment
losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts
is included in profit or loss.
(e) Property, Plant and Equipment
All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and
equipment is recognised as an asset, if and only if, it is probable that future economic benefits associated with the
item will flow to the Group and the cost of the item can be measured reliably.
Subsequent to recognition, property, plant and equipment except for certain freehold land and buildings are
measured at cost less accumulated depreciation and accumulated impairment losses. When significant parts of
property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual
assets with specific useful life and depreciation, respectively. Likewise, when a major inspection is performed, its
cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria is
satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.