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FINANCIAL REPORTS
119
Bursa Malaysia •
Annual Report 2015
NOTES TO THE
FINANCIAL STATEMENTS
31 DECEMBER 2015
2. Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(a) Subsidiaries and basis of consolidation (cont’d.)
(ii) Basis of consolidation (cont’d.)
The statement of comprehensive income reflects the results of the combining entities for the full year, irrespective of when the
combination takes place. Comparatives are presented as if the entities have always been combined since the date the entities had
come under common control.
Under the purchase method of accounting, identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the date of acquisition. Adjustments to those fair values relating to previously
held interests are treated as a revaluation and recognised in other comprehensive income. The cost of a business combination is
measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity
instruments issued, plus any costs directly attributable to the business combination.
Any excess of the cost of business combination over the Group’s share in the net fair value of the acquired subsidiary’s identifiable
assets, liabilities and contingent liabilities is recorded as goodwill on the statement of financial position. The accounting policy for
goodwill is set out in Note 2.4(c)(i). Any excess of the Group’s share in the net fair value of the acquired subsidiary’s identifiable
assets, liabilities and contingent liabilities over the cost of business combination is recognised as income in profit or loss on the date
of acquisition. When the Group acquires a business, embedded derivatives separated from the host contract by the acquiree are
reassessed on acquisition unless the business combination results in a change in the terms of the contract that significantly modifies
the cash flows that would otherwise be required under the contract.
(iii) Transactions with non-controlling interest
Non-controlling interest represents the portion of profit or loss and net assets in subsidiaries not held by the Group and are presented
separately in profit or loss of the Group and within equity in the consolidated statements of financial position, separately from the
parent shareholder’s equity. Transactions with non-controlling interest are accounted for using the entity concept method, whereby,
transactions with non-controlling interests are accounted for as transactions with owners. On acquisition of non-controlling interest,
the difference between the consideration and book value of the share of the net assets acquired is recognised directly in equity. Gain
or loss on disposal to non-controlling interest is recognised directly in equity.
(b) Property, plant and equipment and depreciation
All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised
as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the Company and
the cost of the item can be measured reliably.
Subsequent to the initial recognition, costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the Company and the cost of the
item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are recognised
in profit or loss as incurred.
Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.