Annual report 2014
73
NOTES TO THE FINANCIAL STATEMENTS
31 December 2014 (continued)
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.6 Investments (continued)
(b) Associates (continued)
The interest in an associate is the carrying amount of the investment in the associate under
the equity method together with any long term interest that, in substance, form part of the net
investment in the associate of the Group.
The share of the profit or loss of the associate by the Group during the financial year is included
in the consolidated financial statements, after adjustments to align the accounting policies
with those of the Group, from the date that significant influence commences until the date
that significant influence ceases. Distributions received from the associate reduce the carrying
amount of the investment. Adjustments to the carrying amount could also be necessary for
changes in the proportionate interest of the Group in the associate arising from changes in the
associate’s equity that have not been recognised in the associate’s profit or loss. Such changes
include those arising from the revaluation of property, plant and equipment and from foreign
exchange translation differences. The share of those changes by the Group is recognised
directly in equity of the Group.
When the share of losses of the Group in the associate equals to or exceeds its interest in
the associate, the carrying amount of that interest is reduced to nil and the Group does not
recognise further losses unless it has incurred legal or constructive obligations or made payments
on its behalf.
The most recent available financial statements of the associate are used by the Group in
applying the equity method. When the end of the reporting periods of the financial statements
are not coterminous, the share of results is arrived at using the latest audited financial statements
for which the difference in end of the reporting periods is no more than three (3) months.
Adjustments are made for the effects of any significant transactions or events that occur
between the intervening periods.
When the Group ceases to have significant influence over an associate, any retained interest
in the former associate at the date when significant influence is lost is measured at fair value
and this amount is regarded as the initial carrying amount of a financial asset. The difference
between the fair value of any retained interest plus proceeds from the interest disposed of
and the carrying amount of the investment at the date when equity method is discontinued is
recognised in the profit or loss.
When the interest of the Group in an associate decreases but does not result in a loss of
significant influence, any retained interest is not re-measured. Any gain or loss arising from the
decrease in interest is recognised in profit or loss. Any gains or losses previously recognised in
other comprehensive income are also reclassified proportionately to the profit or loss if that gain
or loss would be required to be reclassified to profit or loss on the disposal of the related assets or
liabilities.
(c) Joint arrangements
A joint arrangement is an arrangement of which two or more parties have joint control. The
parties are bound by a contractual arrangement which gives two or more parties joint control of
the arrangement. Joint control is the contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities require the unanimous consent of
the parties sharing control.
