axiata group berhad | annual report 2015
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2.
BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONTINUED)
(b) Standards and amendments to published standards that are applicable to the Group and the Company but not yet effective
(continued)
The Group and the Company will apply the new standards and amendments to standards in the following period: (continued)
(ii) Financial year beginning on/after 1 January 2018 (continued)
Revenue is recognised when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the
benefits from the good or service. The core principle in MFRS 15 is that an entity recognises revenue to depict the transfer of promised
goods or services to the customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for
those goods or services.
The impact of MFRS 9 and MFRS 15 are still being assessed. Aside from MFRS 9 and MFRS 15, the adoptions of amendments to published
standards are not expected to have a material impact to the financial statements of the Group and the Company.
3.
SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies in the preparation of these financial statements are set out below:
(a) Economic entities in the Group
(i) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group
is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. The existence and effect of potential voting rights that are currently exercisable or convertible are considered only
if the rights are substantive when assessing whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that
control ceases.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a
subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests
issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration
arrangement. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at
their fair values at the acquisition date. The Group recognises any non-controlling interest (“NCI”) in the acquiree on an acquisition-by-
acquisition basis, either at fair value or at the NCI’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.
Under the predecessor method of merger accounting, the results of subsidiaries are presented as if the merger had been effected
throughout the current and previous years. The assets and liabilities combined are accounted for based on the carrying amounts from
the perspective of the common control shareholder at the date of transfer. On consolidation, the cost of the merger is cancelled with
the values of the shares received. Any resulting credit difference is classified as equity and regarded as a non-distributable reserve. Any
resulting debit difference is adjusted against any suitable reserve. Any share premium, capital redemption reserve and any other reserves
which are attributable to share capital of the merged enterprises, to the extent that they have not been capitalised by a debit difference,
are reclassified and presented as movement in other capital reserves.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the
acquiree is remeasured to fair value at the acquisition date through consolidated profit or loss.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to
the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with MFRS 139 either in
profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not remeasured, and
its subsequent settlement is accounted for within equity.
