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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)
(b) Business combinations (cont’d)
Business combinations from 1 January 2010 (cont’d)
In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the
acquisition date and any corresponding gain or loss is recognised in proft 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 identifable 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 identifable 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 proft or loss on the acquisition date.
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 (formerly known as minority interest) was measured at the
proportionate share of the acquiree’s identifable 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.
When the Group acquired a business, embedded derivatives separated from the host contract by the acquiree were not reassessed
on acquisition unless the business combination resulted in a change in the terms of the contract that signifcantly modifed the cash
fows that would otherwise would have been required under the contract.
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