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Appendix
Notes to the Financial Statements
Year ended 31 December 2014
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(cont’d)
2.2 Basis of consolidation
(a) Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the
date on which control is transferred to the Group. Control is the power to govern the mnancial and operating
policies of an entity so as to obtain benemts from its activities. In assessing control, the Group takes into
consideration potential voting rights that are currently exercisable.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships.
Such amounts are generally recognised in the promt or loss.
Any contingent consideration payable is recognised at fair value at the acquisition date and included in the
consideration transferred. If the contingent consideration is classimed as equity, it is not re-measured and
settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent
consideration are recognised in the promt or loss.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that
the Group incurs in connection with a business combination are expensed as incurred.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate
share of the acquiree’s net assets in the event of liquidation are measured either at fair value or at the
non-controlling interests’ proportionate share of the recognised amounts of the acquiree’s identimable net
assets, at the acquisition date. The measurement basis taken is elected on a transaction-by-transaction basis.
All other non-controlling interests are measured at acquisition-date fair value, unless another measurement
basis is required by FRSs. If the business combination is achieved in stages, the Group’s previously held
equity interest in the acquiree is re-measured to fair value at each acquisition date and any changes are
taken to the promt or loss.
(b) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect these returns through
its power over the entity. The mnancial statements of subsidiaries are included in the consolidated mnancial
statements from the date that control commences until the date that control ceases. The accounting policies
of subsidiaries have been changed when necessary to align them with the policies adopted by the Group.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests
even if this results in the non-controlling interests having a demcit balance.
Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as
transactions with owners and therefore no adjustments are made to goodwill and no gain or loss is recognised
in promt or loss. Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities
of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary.
Any surplus or demcit arising from the loss of control is recognised in the promt or loss. If the Group retains
any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is
lost. Subsequently, it is accounted for as an equity-accounted investee or as an available-for-sale mnancial
asset depending on the level of innuence retained.
