55
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2014
2.
Significant accounting policies
(continued)
2.4
Group accounting
(continued)
(a)
Subsidiaries
(continued)
(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.
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.
Please refer to the paragraph 2.10 “Investments in subsidiaries and joint venture” for
the accounting policy on investments in subsidiaries and joint venture in the separate
financial statements of the Company.
(b)
Transactions with non-controlling interests
Changes in the Group’s ownership interest in a subsidiary that do not result in a loss
of control over the subsidiary are accounted for as transactions with equity owners of the
Company. Any difference between the change in the carrying amounts of the non-controlling
interest and the fair value of the consideration paid or received is recognised within equity
attributable to the equity holders of the Company.
(c)
Joint venture
Joint venture is an entity over which the Group has joint control as a result of contractual
arrangements, and rights to the net assets of the entity.
Investment in joint venture is accounted for in the consolidated financial statements using the
equity method of accounting less impairment losses, if any.
(i)
Acquisitions
Investment in joint venture is 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 joint venture represents the excess of the cost of acquisition of
the joint venture over the Group’s share of the fair value of the identifiable net assets of
the joint venture and is included in the carrying amount of the investment.
(ii)
Equity method of accounting
In applying the equity method of accounting, the Group’s share of its joint venture’s
post-acquisition profits or losses is 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 joint venture is
adjusted against the carrying amount of the investment. When the Group’s share of
losses in a joint venture equals to or exceeds its interest in the joint venture, the Group
does not recognise further losses, unless it has obligations or has made payments on
behalf of the joint venture. If the joint venture 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.
