BUILDING LANDMARKS, CHARTING GROWTH
197
Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
3 SIGNIFICANT ACCOUNTING POLICIES
(continued)
3.1 Basis of consolidation
(continued)
(i)
Business combinations (continued)
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the
Group incurs in connection with a business combination are expensed as incurred.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as
transactions with owners in their capacity as owners and therefore no adjustments are made to goodwill and no gain
or loss is recognised in profit or loss. Adjustments to NCI arising from transactions that do not involve the loss of
control are based on a proportionate amount of the net assets of the subsidiary.
(ii)
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights
to, variable returns from its involvement with the entity and has the ability to affect those returns through its power
over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the
date that control commences until the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted
by the Group. Losses applicable to NCI in a subsidiary are allocated to the NCI even if doing so causes the NCI to
have a deficit balance.
(iii)
Acquisition of entities under common control
Business combinations arising from transfers of interests in entities that are under the control of the shareholder that
controls the Group are accounted for as if the acquisition had occurred at the beginning of the earliest comparative
year presented or, if later, at the date that common control was established; for this purpose comparatives are
restated. The assets and liabilities acquired are recognised at the carrying amounts recognised previously in the
Group controlling shareholder’s consolidated financial statements. The components of equity of the acquired entities
are added to the same components within the Group equity and any gain/loss arising is recognised directly in equity.
(iv)
Loss of control
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any NCI and the other
components of equity related to the subsidiary. Any surplus or deficit arising from the loss of control is recognised in
profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value
at the date that control is lost. Subsequently, it is accounted for as an equity-accounted investee or as an available-
for-sale financial asset depending on the level of influence retained.
(v)
Investments in associates and joint ventures (equity-accounted investees)
Associates are those entities in which the Group has significant influence, but not control or joint control, over the
financial and operating policies of these entities. Significant influence is presumed to exist when the Group holds
between 20% or more of the voting power of another entity. A joint venture is an arrangement in which the Group
has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets
and obligations for its liabilities.
