54
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2014
2.
Significant accounting policies
(continued)
2.4
Group accounting
(a)
Subsidiaries
(i)
Consolidation
Subsidiaries are entities (including special purpose entities) over which the Group has
control. The Group controls an entity when the Group is exposed to, or has right to,
variable returns from its involvement with the entity and has the ability to affect those
returns through its power over entity. Subsidiaries are fully consolidated from the date
on which control is transferred to the Group. They are deconsolidated 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.
Non-controlling interests comprise the portion of a subsidiary’s net result of operations
and its net assets, which is attributable to the interests which are not owned directly
or indirectly by the equity holders of the Company. They are shown separately in the
consolidated statement of comprehensive income, statement of changes in equity
and balance sheet. Total comprehensive income is attributed to the non-controlling
interests based on their respective interests in a subsidiary, even if this results in the
non-controlling interests having a deficit balance.
(ii)
Acquisitions
The acquisition method of accounting is used to account for business combinations
entered into by the Group.
The consideration transferred for the acquisition of a subsidiary or business
comprises of the fair value of the assets transferred, the liabilities incurred and the
equity interests issued by the Group. The consideration transferred also includes
any contingent consideration arrangement and any pre-existing equity interest in the
subsidiary measured at their fair values at the acquisition date.
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 (a) the consideration transferred, the amount of any non-controlling
interest in the acquiree and the acquisition-date fair value of any previously held equity
interest in the acquiree over (b) the fair values of the identifiable net assets acquired is
recorded as goodwill. Please refer to the paragraph 2.7 “Intangible assets - Goodwill”
for the subsequent accounting policy on goodwill.
If those amounts are less than the fair value of the identifiable net assets of the
subsidiary acquired and the measurement of all amounts has been reviewed, the
difference is recognised directly in profit or loss as a gain from bargain purchase.
