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NOTES TO FINANCIAL STATEMENTS
For the fnancial year ended 31 March 2014
2. Summary of significant accounting policies (cont’d)
2.6 Basis of consolidation and business combination (cont’d)
(a) Basis of consolidation (cont’d)
Basis of consolidation from 1 January 2010 (cont’d)
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 have not been restated.
(b) Business combinations
Business combinations from 1 January 2010
Business combinations are accounted for by applying the acquisition method. Identifable 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.
When the Group acquires a business, it assesses the fnancial assets and liabilities assumed for appropriate classifcation and
designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.
This includes the separation of embedded derivatives in host contracts by the acquiree.
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 accordance
with FRS 39 either in proft or loss or as a change to other comprehensive income. If the contingent consideration is classifed as
equity, it is not remeasured until it is fnally settled within equity.
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Annual Report 2014 •