74
GHL Systems Berhad
(293040-D)
NOTES TO THE FINANCIAL STATEMENTS
31 December 2014 (continued)
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.6 Investments (continued)
(c) Joint arrangements (continued)
A joint arrangement is either a joint operation or a joint venture.
(i) Joint operation
A joint operation is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the assets, and obligations for the liabilities, relating to the
arrangement. These parties are known as joint operators.
The Group and the Company recognise in relation to its interest in a joint operation:
(a) its assets, including its share of any assets held jointly;
(b) its liabilities, including its share of any liabilities incurred jointly;
(c) its revenue from the sale of its share of the output arising from the joint operation;
(d) its share of the revenue from the sale of the output buy the joint operation; and
(e) its expenses, including its share of any expenses incurred jointly.
When the Group transacts with a joint operation (such as a sale or contribution of assets),
the Group is considered to be conducting the transaction with the other parties to the joint
operation, as such the gains and losses resulting from the transactions are recognised only
to the extent of interests of other parties in the joint operation.
When the Group transacts with a joint operation (such as a purchase of assets), the Group
does not recognise its share of the gains and losses until it resells those assets to a third party.
(ii) Joint venture
A joint venture is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the net assets of the arrangement. These parties are known as
joint venturers.
In the separate financial statements of the Company, an investment in a joint venture is
stated at cost.
Any premium paid for an investment in a joint venture above the fair value of the share
of the identifiable assets, liabilities and contingent liabilities acquired of the Group is
capitalised and included in the carrying amount of the investment in joint venture. Where
there is an objective evidence that the investment in a joint venture has been impaired,
the carrying amount of the investment is tested for impairment in accordance with MFRS
136
Impairment of Assets
as a single asset, by comparing its recoverable amount with its
carrying amount.
The Group recognises its interest in a joint venture as an investment and accounts for that
investment using the equity method in accordance with MFRS 128
Investments in Associates
and Joint Ventures
.
