Notes to the Financial Statements For the financial year ended 31 December 2010
2.
SIGNIFICANT ACCOUNTING POLICIES (continued)
F.
Group accounting (continued) (1)
Subsidiaries (continued) (ii)
Acquisition of businesses (continued)
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. Refer to Note 2H for the accounting policy on goodwill. (iii)
Disposal of subsidiaries or businesses
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 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 interest in the entity is remeasured at fair value. The difference between the carrying amount of the retained investment at the date when control is lost and its fair value is recognised in profit or loss.
Refer to Note 2K for the Company’s accounting policy on investments in subsidiaries.
(2) Transactions with non-controlling interests
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Changes in the Company’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 Group. Any difference between the carrying amounts of the non-controlling interests and the fair value of the consideration paid or received is recognised in equity.
(3)
Associated companies and joint ventures
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. Joint ventures are entities over which the Group has contractual arrangements to jointly share the control over the economic activity of the entities with one or more parties. Investments in associated companies and joint ventures are accounted for in the consolidated financial statements using the equity method of accounting less impairment losses, if any.
Investments in associated companies and joint ventures 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 cost directly attributable to the acquisition. Investments in associated companies and joint ventures in the consolidated balance sheet includes goodwill identified (net of accumulated impairment loss) on acquisition. Refer to Note 2H for the Group’s accounting policy on goodwill.
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