NOTES TO THE FINANCIAL STATEMENTS
For The Financial Period From 1 January 2014 To 31 March 2015 (Cont’d)
70
Annual Report 2015
4.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
4.6 INVESTMENTS IN ASSOCIATES
An associate is an entity in which the Group and the Company have a long-term equity interest
and where it exercises significant influence over the financial and operating policies.
Investments in associates are stated at cost in the statement of financial position of theCompany,
and are reviewed for impairment at the end of the reporting period if events or changes in
circumstances indicate that the carrying values may not be recoverable. The cost of the
investment includes transaction costs.
The investment in an associate is accounted for in the consolidated statement of financial
position using the equity method, based on the financial statements of the associate made up
to 31 March 2015. The Group’s share of the post-acquisition profits and other comprehensive
income of the associate is included in the consolidated statement of profit or loss and other
comprehensive income, after adjustment if any, to align the accounting policies with those
of the Group, from the date that significant influence commences up to the effective date
on which significant influence ceases or when the investment is classified as held for sale. The
Group’s interest in the associate is carried in the consolidated statement of financial position
at cost plus the Group’s share of the post-acquisition retained profits and reserves. The cost of
investment includes transaction costs.
When the Group’s share of losses exceeds its interest in an associate, the carrying amount of
that interest is reduced to zero, and the recognition of further losses is discontinued except to
the extent that the Group has an obligation.
Unrealised gains on transactions between the Group and the associate are eliminated to the
extent of the Group’s interest in the associate. Unrealised losses are eliminated unless cost
cannot be recovered.
When theGroup ceases to have significant influence over an associate and the retained interest
in the former associate is a financial asset, the Groupmeasures the retained interest at fair value
at that date and the fair value is regarded as the initial carrying amount of the financial asset in
accordance with MFRS 139. Furthermore, the Group also reclassifies its share of the gain or loss
previously recognised in other comprehensive income of that associate to profit or loss when
the equity method is discontinued. However, the Group will continue to use the equity method
if the dilution does not result in a loss of significant influence or when an investment in a joint
venture becomes an investment in an associate. Under such changes in ownership interest, the
retained investment is not remeasured to fair value but a proportionate share of the amounts
previously recognised in other comprehensive income of the associate will be reclassified to
profit or loss where appropriate. All dilution gains or losses arising in investments in associates
are recognised in profit or loss.
4.7 GOODWILL
Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value
of goodwill is reviewed for impairment annually or more frequently if events or changes in
circumstances indicate that the carrying amount may be impaired. The impairment value of
goodwill is recognised immediately in profit or loss. An impairment loss recognised for goodwill
is not reversed in a subsequent period.
Under the acquisition method, any excess of the sum of the fair value of the consideration
transferred in the business combination, the amount of non-controlling interests recognised
and the fair value of the Group’s previously held equity interest in the acquiree (if any), over
the net fair value of the acquiree’s identifiable assets and liabilities at the date of acquisition is
recorded as goodwill.
Where the latter amount exceeds the former, after reassessment, the excess represents a
bargain purchase gain and is recognised as a gain in profit or loss.
