For the financial year ended 31 December 2015
60
HAW PAR CORPORATION LIMITED
2. SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(c) Group accounting
(continued)
(1) Subsidiaries (continued)
(iii) Disposals (continued)
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.
NOT E S TO T H E F I NAN C I A L S TAT EME N T S
(CONTINUED)
