notes to the
financial statements
31 December 2015
2.
Summary of significant accounting policies (cont’d)
Business combinations (cont’d)
For business combinations achieved in stages, any equity interest held in the acquiree is remeasured immediately before
achieving control at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss.
Where the fair values are measured on a provisional basis, they are finalised within one year from the acquisition date
with consequent retrospective changes to the amounts recognised at the acquisition date to reflect new information
obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the
measurement of the amounts recognised as of that date.
Goodwill and fair value adjustments resulting from the application of acquisition method of accounting at the date of
acquisition are treated as assets and liabilities of the acquired entity and are recorded at the exchange rates prevailing
at the acquisition date and are subsequently translated at the exchange rates ruling at the end of the reporting period.
In comparison to the above mentioned requirements, the following differences were applied to business combinations
prior to 1 January 2010:
Business combinations are accounted for by applying the purchase method. Transaction costs directly attributable to
the acquisition formed part of the acquisition costs. The non-controlling interest (formerly known as minority interest)
was measured at the proportionate share of the acquiree’s identifiable net assets.
Business combinations achieved in stages were accounted for as separate steps. Adjustments to those fair values
relating to previously held interests are treated as a revaluation and recognised in equity. Any additional acquired share
of interest did not affect previously recognised goodwill.
Non-controlling interests
Non-controlling interest is equity in a subsidiary not attributable, directly or indirectly, to the Group as the parent. The
non-controlling interest is presented in the consolidated statement of financial position within equity, separately from
the equity of the owners of the Company. For each business combination, any non-controlling interest in the acquiree
(subsidiary) is initially measured either at fair value or at the non-controlling interest’s proportionate share of the
acquiree’s identifiable net assets. Where the non-controlling interest is measured at fair value, the valuation techniques
and key model inputs used are disclosed. Profit or loss and each component of other comprehensive income are
attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income is attributed
to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests
having a deficit balance.
Goodwill
Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business
combination that are not individually identified and separately recognised. Goodwill is recognised as of the acquisition
date and measured as the excess of (a) over (b); (a) being the aggregate of: (i) the consideration transferred measured
at acquisition date fair value; (ii) the amount of any non-controlling interest in the acquiree measured either at fair value
or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets; and (iii) in a business
combination achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the
acquiree; and (b) being the net of the identifiable assets acquired and the liabilities assumed measured at acquisition
date fair values in accordance with FRS 103 Business Combinations.
After initial recognition, goodwill acquired in a business combination is measured at cost less any accumulated impairment
losses. Goodwill is not amortised. Irrespective of whether there is any indication of impairment, goodwill is tested for
impairment at least annually. Goodwill impairment is not reversed in any circumstances.
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