NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
58
THE STRAITS TRADING COMPANY LIMITED
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.4
BASIS OF CONSOLIDATION AND BUSINESS COMBINATIONS (CONT’D)
(a)
Basis of consolidation (cont’d)
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.
(b)
Business combinations and goodwill
Business combination from 1 January 2010
Business combinations are accounted for by applying the acquisition method. Identifiable assets acquired and
liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.
Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services
are received.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition
date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or
liability will be recognised in profit or loss.
The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if
any), that are present ownership interests and entitle their holders to a proportionate share of net assets in the event
of liquidation, is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate
share of the acquiree’s identifiable net assets. Other components of non-controlling interests are measured at their
acquisition date fair value, unless another measurement basis is required by another FRS.
Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of
non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in
the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill.
In instances where the latter amount exceeds the former, the excess is recognised as gain on bargain purchase in
profit or loss on the acquisition date.
