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50 kingsmen creatives ltd
NOTES TO
FINANCIAL STATEMENTS
31 December 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.4 Basis of consolidation and business combinations
(a) Basis of consolidation
Business combinations from 1 January 2010
The consolidated fnancial statements comprise the fnancial statements of the Company and its subsidiaries as at the end
of the reporting period. The fnancial statements of the subsidiaries used in the preparation of the consolidated fnancial
statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like
transactions and events in similar circumstances.
All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions and
dividends are eliminated in full.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to
be consolidated until the date that such control ceases.
Losses within a subsidiary are attributed to the non-controlling interest even if that results in a defcit balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the
Group loses control over a subsidiary, it:
- De-recognises the assets (including goodwill) and liabilities of the subsidiary at their carrying amounts at the date when
control is lost;
- De-recognises the carrying amount of any non-controlling interest;
- De-recognises the cumulative translation differences recorded in equity;
- Recognises the fair value of the consideration received;
- Recognises the fair value of any investment retained;
- Recognises any surplus or defcit in proft or loss;
- Re-classifes the Group’s share of components previously recognised in other comprehensive income to proft or loss or
retained earnings, as appropriate.
Basis of consolidation prior to 1 January 2010
Certain of the above-mentioned requirements were applied on a prospective basis. The following differences, however, are
carried forward in certain instances from the previous basis of consolidation:
- Acquisition of non-controlling interests, prior to 1 January 2010, were accounted for using the parent entity extension
method, whereby, the difference between the consideration and the book value of the share of the net assets acquired
were recognised in goodwill.
- Losses incurred by the Group were attributed to the non-controlling interest until the balance was reduced to nil. Any
further losses were attributed to the Group, unless the non-controlling interest had a binding obligation to cover these.
Losses prior to 1 January 2010 were not reallocated between non-controlling interest and the owners of the Company.
- Upon loss of control, the Group accounted for the investment retained at its proportionate share of net asset value at
the date control was lost. The carrying value of such investments as at 1 January 2010 has not been restated.