NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
59
ANNUAL REPORT 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.4
BASIS OF CONSOLIDATION AND BUSINESS COMBINATIONS (CONT’D)
(b)
Business combinations and goodwill (cont’d)
Business combinations prior to 1 January 2010
In comparison to the above mentioned requirements, the following differences applied:
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 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.
Where the Group acquired a business, embedded derivatives separated from the host contract by the acquiree were
not reassessed on acquisition unless the business combination results in a change in the terms of the contract that
significantly modifies the cash flows that otherwise would have been required under the contract.
Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic outflow
was more likely than not and a reliable estimate was determinable. Subsequent adjustments to the contingent
consideration were recognised as part of goodwill.
Goodwill
Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less any accumulated
impairment losses.
For purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date,
allocated to the Group’s cash-generating units that are expected to benefit from the synergies of the combination,
irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
The cash-generating units to which goodwill have been allocated is tested for impairment annually and whenever
there is an indication that the cash-generating unit may be impaired. Impairment is determined for goodwill by
assessing the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the
goodwill relates.
2.5
TRANSACTIONS WITH NON-CONTROLLING INTERESTS
Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company.
Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as
equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are
adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the
non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity
and attributed to owners of the Company.
