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62 HAW PAR CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(c) Group accounting (continued)
(1) Subsidiaries (continued)
(ii) Acquisitions
The acquisition method of accounting is used to account for business combinations by the
Group.
The consideration transferred for the acquisition of a subsidiary or business comprises the fair
value of the assets transferred, the liabilities incurred and the equity interests issued by the
Group. The consideration transferred also includes the fair value of any contingent consideration
arrangement and the fair value of any pre-existing equity interest in the subsidiary.
Acquisition-related costs are expensed as incurred.
Identifable assets acquired and liabilities and contingent liabilities assumed in a business
combination are, with limited exceptions, measured initially at their fair values at the
acquisition date.
On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in
the acquiree at the date of acquisition either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s net identifable assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the
acquiree and the acquisition-date fair value of any previous equity interest in the acquiree
over the fair value of the net identifable assets acquired is recorded as goodwill. Please refer
to Note 2(e)(1) for the Group’s accounting policy on goodwill on acquisition of subsidiaries.
(iii) Disposals
When a change in the Company’s ownership interest in a subsidiary results in a loss of control
over the subsidiary, the assets and liabilities of the subsidiary including any goodwill are
derecognised. Amounts previously recognised in other comprehensive income in respect of
that entity are also reclassifed to proft or loss or transferred directly to retained earnings if
required by a specifc Standard.
Any retained equity interest in the entity is remeasured at fair value. The difference between
the carrying amount of the retained interest at the date when control is lost and its fair value
is recognised in proft or loss.
(2) Associated companies
Associated companies are entities over which the Group has signifcant infuence, but not control,
generally accompanying a shareholding of between and including 20% and 50% of the voting rights.
Investments in associated companies are accounted for in the consolidated fnancial statements
using the equity method of accounting less impairment losses, if any. Investments in associated
companies in the consolidated statement of fnancial position include goodwill (net of accumulated
impairment loss) identifed on acquisition, where applicable. Please refer to Note 2(e)(1) for the
Group’s accounting policy on goodwill.