NOTES TO THE FINANCIAL STATEMENTS
For the Financial Year Ended 31 December 2014
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.5 BASIS OF CONSOLIDATION AND BUSINESS COMBINATIONS
A)
Basis of consolidation
Basis of consolidation from 1 January 2010
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries
as at the end of the reporting period. The financial statements of the subsidiaries used in the preparation of the
consolidated financial 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 deficit 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 deficit in profit or loss;
– Reclassifies the Group’s share of components previously recognised in other comprehensive income to
profit 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 previous basis of consolidation:
– Acquisition of non-controlling interests, prior to 1 January 2010, was 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 was 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 the 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 investment as at 1 January 2010 has not
been restated.
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THE STRAITS TRADING COMPANY LIMITED ANNUAL REPORT 2014
