HAW PAR CORPORATION LIMITED
60
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
For the financial year ended 31 December 2014
2.
SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(c)
Group accounting
(continued)
(1)
Subsidiaries (continued)
(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
reclassified to profit or loss or transferred directly to retained earnings if required by a specific 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 profit or loss.
(2)
Associated companies
Associated companies are entities over which the Group has significant influence, but not control,
generally accompanying a shareholding of between and including 20% and 50% of the voting rights.
Where the Group holds less than 20% of voting rights, the Group evaluates the extent of significant
influence to determine if it should still regard the entity as an associated company. Investments in
associated companies are accounted for in the consolidated financial statements using the equity
method of accounting less impairment losses, if any. Investments in associated companies in the
consolidated statement of financial position include goodwill (net of accumulated impairment loss)
identified on acquisition, where applicable. Please refer to Note 2(e)(1) for the Group’s accounting
policy on goodwill.
(i)
Acquisitions
Investments in associated companies are initially recognised at cost. The cost of an acquisition
is measured at the fair value of the assets given, equity instruments issued or liabilities incurred
or assumed at the date of exchange, plus costs directly attributable to the acquisition. Goodwill
on associated companies represents the excess of the cost of acquisition of the associate over
the Group’s share of the fair value of the identifiable net assets of the associate and is included
in the carrying amount of the investments.
(ii)
Equity method of accounting
In applying the equity method of accounting, the Group’s share of its associated companies’
post-acquisition profits or losses are recognised in profit or loss and its share of post-acquisition
other comprehensive income is recognised in other comprehensive income. These post-acquisition
movements and distributions received from the associated companies are adjusted against the
carrying amount of the investments. When the Group’s share of losses in an associated company
equals or exceeds its interest in the associated company, including any other unsecured non-
current receivables, the Group does not recognise further losses, unless it has legal or constructive
obligations to make or has made payments on behalf of the associated company. If the associated
company subsequently reports profits, the Group resumes recognising its share of those profits
only after its share of the profits equals the share of losses not recognised.
Unrealised gains on transactions between the Group and its associated companies are eliminated
to the extent of the Group’s interest in the associated companies. Unrealised losses are also
eliminated unless the transaction provides evidence of an impairment of the asset transferred.
The accounting policies of associated companies have been changed where necessary to ensure
consistency with the accounting policies adopted by the Group.
