72
GHL Systems Berhad
(293040-D)
NOTES TO THE FINANCIAL STATEMENTS
31 December 2014 (continued)
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.5 Leases and hire purchase (continued)
(c) Leases of land and buildings (continued)
The minimum lease payments including any lump-sum upfront payments made to acquire the
interest in the land and buildings are allocated between the land and the buildings elements
in proportion to the relative fair values of the leasehold interests in the land element and the
buildings element of the lease at the inception of the lease.
For a lease of land and buildings in which the amount that would initially be recognised for the
land element is immaterial, the land and buildings are treated as a single unit for the purpose of
lease classification and is accordingly classified as a finance or operating lease. In such a case,
the economic life of the buildings is regarded as the economic life of the entire leased asset.
4.6 Investments
(a) Subsidiaries
A subsidiary is an entity in which the Group and the Company are exposed, or have rights, to
variable returns from its involvement with the subsidiary and have the ability to affect those
returns through its power over the subsidiary.
An investment in subsidiary, which is eliminated on consolidation, is stated in the separate
financial statements of the Company at cost. Put options written over non-controlling interests
on the acquisition of subsidiary shall be included as part of the cost of investment in the separate
financial statements of the Company. Subsequent changes in the fair value of the written put
options over non-controlling interests shall be recognised in profit or loss. Investments accounted
for at cost shall be accounted for in accordance with MFRS 5
Non-current Assets Held for Sale
and Discontinued Operations
when they are classified as held for sale (or included in a disposal
group that is classified as held for sale) in accordance with MFRS 5.
When control of a subsidiary is lost as a result of a transaction, event or other circumstance,
the Group would derecognise all assets, liabilities and non-controlling interests at their carrying
amount and to recognise the fair value of the consideration received. Any retained interest
in the former subsidiary is recognised at its fair value at the date control is lost. The resulting
difference is recognised as a gain or loss in profit or loss.
(b) Associates
An associate is an entity over which the Group and the Company have significant influence
and that is neither a subsidiary nor an interest in a joint arrangement. Significant influence is the
power to participate in the financial and operating policy decisions of the investee but is neither
control nor joint control over those policies.
In the separate financial statements of the Company, an investment in associate is stated at
cost less impairment losses.
An investment in associate is accounted for in the consolidated financial statements using the
equity method of accounting. The investment in associate in the consolidated statement of
financial position is initially recognised at cost and adjusted thereafter for the post acquisition
change in the share of net assets of the investments of the Group.
