NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2014
Financial Statements
87
Annual Report 2014
2.
Significant accounting policies
(continued)
2.3
Group accounting
(a)
Subsidiaries
(i)
Consolidation
Subsidiaries are all entities (including structured entities) over which the Group has control.
The Group controls an entity when the Group is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its
power over the entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are deconsolidated from the date on that control ceases.
In preparing the consolidated financial statements, transactions, balances and unrealised
gains on transactions between group entities are eliminated. Unrealised losses are also
eliminated but are considered an impairment indicator of the asset transferred. Accounting
policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
Non-controlling interests comprise the portion of a subsidiary’s net results of operations and
its net assets, which is attributable to the interests that are not owned directly or indirectly
by the equity holders of the Company. They are shown separately in the consolidated profit
or loss, statement of comprehensive income, statement of changes in equity and balance
sheet. Total comprehensive income is attributed to the non-controlling interests based on
their respective interests in a subsidiary, even if this results in the non-controlling interests
having a deficit balance.
(ii)
Acquisitions
The acquisition method of accounting is used to account for business combinations by the
Group.
The consideration transferred for the acquisition of a subsidiary or business comprises the
fair value of the assets transferred, the liabilities incurred and the equity interests issued
by the Group. The consideration transferred also includes any contingent consideration
arrangement and any pre-existing equity interest in the subsidiary measured at their fair
values at the acquisition date.
Acquisition-related costs are expensed as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are, with limited exceptions, measured initially at their fair values at the
acquisition date.
On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in
the acquiree at the date of acquisition either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s identifiable net assets.
The excess of (i) the consideration transferred, the amount of any non-controlling interest in
the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree
over (ii) the fair value of the identifiable net assets acquired is recorded as goodwill. Please
refer to Note 2.5 “Intangible assets - Goodwill” for the subsequent accounting policy on
goodwill.
