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PERENNIAL REAL ESTATE HOLDINGS LIMITED
Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
3 SIGNIFICANT ACCOUNTING POLICIES
The Group adopted new or revised financial reporting standards and interpretations which became effective from financial
period beginning 1 July 2014. The initial adoption of these standards and interpretations did not have a material impact on
the financial statements.
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 entities.
3.1 Basis of consolidation
(i)
Business combinations
Business combinations are accounted for using the acquisition method in accordance with FRS 103
Business
Combinations
as at the acquisition date, which is the date on which control is transferred to the Group.
The Group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests (“NCI”) in the acquiree; plus
• if the business combination is achieved in stages, the fair value of the pre-existing equity interest in
the acquiree,
over the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. Any
goodwill that arises is tested annually for impairment.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships.
Such amounts are generally recognised in profit or loss.
Any contingent consideration payable is recognised at fair value at the date of acquisition and included in the
consideration transferred. If the contingent consideration that meets the definition of a financial instrument is classified
as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair
value of the contingent consideration are recognised in profit or loss.
When share-based payment awards (replacement awards) are exchanged for awards held by the acquiree’s employees
(acquiree’s awards) and relate to past services, then all or a portion of the amount of the acquirer’s replacement awards
is included in measuring the consideration transferred in the business combination. This determination is based on the
market-based value of the replacement awards compared with the market-based value of the acquiree’s awards and
the extent to which the replacement awards relate to past and/or future service.
NCI that are present ownership interests and entitle their holders to a proportionate share of the acquiree’s net
assets in the event of liquidation are measured either at fair value or at the NCI’s proportionate share of the
recognised amounts of the acquiree’s identifiable net assets, at the acquisition date. The measurement basis taken
is elected on a transaction-by-transaction basis. All other NCI are measured at acquisition-date fair value, unless
another measurement basis is required by FRSs.
