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Datasonic Group Berhad
(Company No. 809759-X)
88
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended 31 March 2016
(Continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
4.5 INVESTMENTS IN SUBSIDIARIES
Investments in subsidiaries are stated at cost in the statement of financial position of the
Company, and are reviewed for impairment at the end of the financial period if events or
changes in circumstances indicate that the carrying values may not be recoverable. The cost
of the investments includes transaction costs.
On the disposal of the investments in subsidiaries, the difference between the net disposal
proceeds and the carrying amount of the investments is recognised in profit or loss.
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 the
Company, and are reviewed for impairment at the end of the financial year 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 the end of the financial year. 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 theGroup's interest in the associate. Unrealised losses are eliminated unless cost cannot
be recovered.
When the Group ceases to have significant influence over an associate and the retained
interest in the former associate is a financial asset, the Group measures 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 into
profit or loss when the equity method is discontinued.