For the financial year ended 31 December 2015
59
ANNUAL REPORT 2015
2. SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(c) Group accounting
(1) Subsidiaries
(i) Consolidation
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the
Group is exposed to, or has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power over the entity including those entities which the
Group has less than 50% equity interest.
Subsidiaries are consolidated from the date on which control is transferred to the Group. They are
de-consolidated from the date on which control ceases.
In preparing the consolidated financial statements, transactions, balances and unrealised gains on
transactions between group entities are eliminated. Unrealised losses are also eliminated but are
considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with the policies adopted by the Group.
(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.
Identifiable 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 identifiable 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 identifiable 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.
Please refer to Note 2(g) for the Company’s accounting policy on investments in subsidiaries and
associated companies.
(iii) Disposals
When a change in the Group’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.
NOT E S TO T H E F I NAN C I A L S TAT EME N T S
(CONTINUED)
