PRG Holdings Berhad Annual Report 2020

Annual Report 2020 89 4. SIGNIFICANT ACCOUNTING POLICIES (continued) 4.7 Investments (continued) (c) Joint arrangements (continued) 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 . Under the equity method, the investment in joint venture is initially recognised at cost, and the carrying amount is increased or decreased to recognise the Group’s share of profit or loss and other comprehensive income of the joint venture after the date of acquisition. When the Group’s share of losses in a joint venture equal or exceeds its interest in a joint venture, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the joint venture. 4.8 Intangible assets (a) Goodwill Goodwill recognised in a business combination is an asset at the acquisition date and is initially measured at cost being the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s previously held equity interest (if any) in the entity over net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the interest of the Group in the fair value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain. After initial recognition, goodwill is measured at cost less accumulated impairment losses, if any. Goodwill is not amortised but instead tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount could be impaired. Objective events that would trigger a more frequent impairment review include adverse industry or economic trends, significant restructuring actions, significantly lowered projections of profitability, or a sustained decline in the acquiree’s market capitalisation. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill arising on acquisition of associates and a joint venture is the excess of cost of investment over the share of the net fair value of net assets of the associates and joint venture’s identifiable assets and liabilities by the Group at the date of acquisition. Goodwill relating to the associates and joint venture is included in the carrying amount of the investment and is not amortised. The excess of the share of the net fair value of the associates and joint venture’s identifiable assets and liabilities by the Group over the cost of investment is included as income in the determination of the share of the associates and joint venture’s profit or loss by the Group in the period in which the investment is acquired. (b) Other intangible assets Other intangible assets are recognised only when the identifiability, control and future economic benefit probability criteria are met. The Group recognises an intangible asset of the acquiree at the acquisition date separately from goodwill, irrespective of whether the asset had been recognised by the acquiree before the business combination. Intangible assets are initially measured at cost. The cost of intangible assets recognised in a business combination is their fair values as at the date of acquisition. Notes to the Financial Statements 31 December 2020 cont’d