N OTES T O T HE FI NA N C I A L STAT EM EN T S |
For the Year Ended 31 March 2018
5 Significant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these financial statements and have been applied consistently by the Group. The significant accounting policies of the Group are detailed below: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) (o) (p) (q) (r) (s)
Basis of consolidation Subsidiaries and associates Revenue Employee benefits Finance income and finance costs Financial instruments Impairment of non-derivative financial assets Inventory Property, plant and equipment Intangible assets Quota shares Investment property Biological assets Impairment of non-financial assets Leases Provisions Income Tax Goods and Services Tax Statement of Cash Flows
(a) Basis of consolidation
i. Business combinations Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. The Group controls an entity when it has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. The Group measures goodwill at the acquisition date as: The aggregate of: • The fair value of consideration transferred • The recognised amount of any minority interests in the acquiree, and • The fair value of any pre-existing equity interest in the acquiree Less: • The fair value of the net identifiable assets acquired and liabilities assumed. Any gain on bargain purchase gain is recognised immediately in surplus or deficit. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in surplus or deficit. Transactions costs related to a business combination incurred by the Group, other than those associated with the issue of debt or equity securities, are expensed in surplus or deficit as incurred. Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not subsequently remeasured and settlement is accounted for within net assets/equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in surplus or deficit. ii. Controlled entities Controlled entities are entities controlled by the Group, being where the Group has power to govern the financial and operating policies of another entity so as to benefit from that entity’s activities. The financial statements of the Group’s controlled entities are included in the consolidated financial statements from the date that control commences until the date that control ceases.
Subsequent changes in a controlled entity that do not result in a loss of control are accounted for as transactions with controllers of the controlling entity in their capacity as controllers, within net assets/equity. iii. Loss of control of a controlled entity On the loss of control, the Group derecognises the assets and liabilities of the controlled entity, any minority interest, and the other components of net assets/equity related to the controlled entity. Any surplus or deficit arising on the loss of control is recognised in surplus or deficit. If the Group retains any interest in the previously controlled entity, then such interest is measured at fair value at the date that control is lost. Subsequently, the retained interest is either accounted for as an equity-accounted associated or an availablefor-sale financial asset depending on the level of influence retained. v. Associates Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. Investments in associates for the Group are accounted for using the equity method and are recognised initially at cost, including directly attributable transaction costs. Investment in the Parent is carried at cost. The consolidated financial statements include the Group’s share of the surplus or deficit and other comprehensive revenue and expense of its equity accounted associates and jointly-controlledentities, after adjustments to align the accounting policies with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases. When the Group’s share of losses exceeds its interest in its equity accounted associates and jointly-controlled-entities, the carrying amount of the investment, including any long-term investments that form part thereof, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. vi. Joint ventures Joint ventures are those entities over whose activities the Group has joint control, established by a binding agreement and requiring unanimous consent for strategic financial and operating decisions. Joint ventures that are structured in a separate vehicle are classified jointly-controlled-entities and are accounted for using the equity method (as detailed above for associates) proportionate consolidation method whereby a Group’s share of each of the assets, liabilities, revenue and expenses of a jointly controlled entity is combined line by line with similar items in the Group’s financial statements. Joint ventures that are not structured in a separate vehicle are classified as either jointly-controlled-operations or jointly controlled assets. The consolidated financial statements include the Group’s share of assets, liabilities, expenses, and revenues from the jointly-controlled-operation or jointly controlled asset on a line-by-line basis. vii. Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted associates and jointly-controlled-entities are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
TWENTY SEVENTEEN - TWENTY EIGHTEEN | HE KORONA WHAKATAENA