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GHL Systems Berhad
(293040-D)
Annual report 2015
Notes to the Financial Statements
31 December 2015 (continued)
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.3 Business combinations (continued)
Any contingent consideration payable is recognised at fair value at the acquisition date. Measurement
period adjustments to contingent consideration are dealt with as follows:
(a) If the contingent consideration is classified as equity, it is not remeasured and settlement is
accounted for within equity.
(b) Subsequent changes to contingent consideration classified as an asset or liability that is
a financial instrument within the scope of MFRS 139 are recognised either in profit or loss or in
other comprehensive income in accordance with MFRS 139. All other subsequent changes are
recognised in profit or loss.
In a business combination achieved in stages, previously held equity interests in the acquiree are re-
measured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit
or loss.
Components of non-controlling interests in the acquiree that are present ownership interests and entitle
their holders to a proportionate share of the entity’s net assets in the event of liquidation are initially
measured at the present ownership instruments’ proportionate share in the recognised amounts of the
acquiree’s identifiable net assets. All other components of non-controlling interests shall bemeasured at
their acquisition-date fair values, unless another measurement basis is required by MFRSs. The choice of
measurement basis is made on a combination-by-combination basis. Subsequent to initial recognition,
the carrying amount of non-controlling interests is the amount of those interests at initial recognition
plus the non-controlling interests’ share of subsequent changes in equity.
Any excess of the sum of the fair value of the consideration transferred in the business combination,
the amount of non-controlling interest in the acquiree (if any), and the fair value of the previously held
equity interest of the Group in the acquiree (if any), over the net fair value of the acquiree’s identifiable
assets and liabilities is recorded as goodwill in the statement of financial position. The accounting policy
for goodwill is set out in Note 4.7(a) to the financial statements. In instances where the latter amount
exceeds the former, the excess is recognised as a gain on bargain purchase in profit or loss on the
acquisition date.
4.4 Property, plant and equipment and depreciation
All items of property, plant and equipment are initially measured at cost. Cost includes expenditure
that is directly attributable to the acquisition of the asset.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset,
as appropriate, only when the cost is incurred and it is probable that the future economic benefits
associated with the asset would flow to the Group and the cost of the asset could be measured
reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-
day servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also
comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is
located for which the Group is obligated to incur when the asset is acquired, if applicable.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the
total cost of the asset and which has different useful life, is depreciated separately.