77
A N N U A L R E P O R T 2 0 1 6
For the Financial Year Ended 31 March 2016
NOTES TO THE
FINANCIAL STATEMENTS
2.
Summary of significant accounting policies (cont¡¯d)
2.10
Associates
An associate is an entity over which the Group has the power to participate in the financial and operating policy decisions of the investee but
does not have control or joint control of those policies.
The Group account for its investments in associates using the equity method from the date on which it becomes an associate.
On acquisition of the investment, any excess of the cost of the investment over the Group¡¯s share of the net fair value of the investee¡¯s
identifiable assets and liabilities is accounted as goodwill and is included in the carrying amount of the investment. Any excess of the Group¡¯s
share of the net fair value of the investee¡¯s identifiable assets and liabilities over the cost of the investment is included as income in the
determination of the entity¡¯s share of the associate¡¯s profit or loss in the period in which the investment is acquired.
Under the equity method, the investment in associates are carried in the balance sheet at cost plus post-acquisition changes in the Group¡¯s
share of net assets of the associates. The profit or loss reflects the share of results of the operations of the associates. Distributions received
from associates reduce the carrying amount of the investment. Where there has been a change recognised in other comprehensive income
by the associates, the Group recognises its share of such changes in other comprehensive income. Unrealised gains and losses resulting from
transactions between the Group and associate are eliminated to the extent of the interest in the associates.
When the Group¡¯s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the associate.
After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the
Group¡¯s investment in associate. The Group determines at the end of each reporting period whether there is any objective evidence that
the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the
recoverable amount of the associate and its carrying value and recognises the amount in profit or loss.
Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.
Upon loss of significant influence or joint control over the associate, the Group measures the retained interest at fair value. Any difference
between the fair value of the aggregate of the retained interest and proceeds from disposal and the carrying amount of the investment at
the date the equity method was discontinued is recognised in profit or loss.
