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Notes To The
Financial Statements
As at 31 March 2019
2.
Significant accounting policies (cont’d.)
2.3 Summary of significant accounting policies (cont’d.)
(a) Basis of consolidation (cont’d.)
Business combinations (cont’d.)
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 MFRS 9 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 MFRS 9, it is measured in
accordance with the appropriate MFRS.
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.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration
transferred and the amount recognised for non-controlling interests over the net identifiable assets
acquired and liabilities assumed. If this consideration is lower than fair value of the net assets of the
subsidiary company acquired, the difference is recognised in profit or loss. The accounting policy for
goodwill is set out in Note 2.3(h).
(b) Subsidiaries
A subsidiary company is an entity over which the Group has the following:
(i) Power over the investee (i.e. existing rights that give it the current ability to direct the relevant
activities of the investee);
(ii) Exposure, or rights, to variable returns from its investment with the investee; and
(iii) The ability to use its power over the investee to affect its returns.
In the Company’s separate financial statements, investments in subsidiary companies are accounted
for 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.
financial
statements
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