axiata group berhad | annual report 2015
130
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(a) Economic entities in the Group (continued)
(i) Subsidiaries (continued)
The excess of the consideration transferred by the Group, the amount of any NCI in the acquiree and the acquisition-date fair value of any
previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recognised as goodwill. If the total of
consideration transferred, NCI recognised and previously held interest measured is less than the fair value of the net assets of the subsidiary
acquired in the case of a bargain purchase, the difference is recognised directly in the profit or loss. The accounting policy of goodwill is
stated in Note 3(b)(i) to the financial statements. Goodwill is carried at cost less accumulated impairment losses, if any.
Inter-company transactions, balances and unrealised gains on transactions between the Group’s companies are eliminated. Profits and
losses resulting from inter-company transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with the policies adopted by the Group.
(ii) Changes in ownership interests in subsidiaries without change of control
Transactions with NCIs that do not result in loss of control are accounted for as equity transactions - that is, as transactions with the owners
in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying
value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to NCIs are also recorded in equity.
(iii) Disposal of subsidiaries
When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the date when control is lost,
with the change in carrying amount recognised in consolidated profit or loss. The fair value is the initial carrying amount for the purposes
of subsequently accounting for the retained interest as an associate, a joint venture or financial asset. In addition, any amounts previously
recognised in other comprehensive income in respect of that subsidiary are accounted for as if the Group had directly disposed of the
related assets or liabilities. This may mean that amounts previously recognised in consolidated other comprehensive income are reclassified
to consolidated profit or loss.
(iv) Joint arrangements
A joint arrangement is an arrangement of which there is contractually agreed sharing of control by the Group with one or more parties,
where decisions about the relevant activities relating to the joint arrangement require unanimous consent of the parties sharing control.
The classification of a joint arrangement as a joint operation or a joint venture depends upon the rights and obligations of the parties to
the arrangement. A joint venture is a joint arrangement whereby the joint ventures have rights to the net assets of the arrangement. A
joint operation is a joint arrangement whereby the joint operators have rights to the assets and obligations for the liabilities, relating to the
arrangement.
The Group’s interest in joint venture is accounted for in the consolidated financial statements using the equity method as stated in Note
3(a)(v) to the financial statements. Where necessary, in applying the equity method, adjustments are made to the financial statements of
joint venture to ensure consistency of the accounting policies with those of the Group.
(v) Associates
Associates are all entities which the Group has significant influence, but no control, generally accompanying a shareholding of between
20% and 50% of the voting rights. Significant influence is power to participate in the financial and operating policy decisions of the
associates but not power to exercise control or jointly control over those policies.
Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting. Under the
equity method of accounting, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise
the Group’s share of the post-acquisition results and changes of the associate’s reserves in other comprehensive income after the date
of acquisition and net off with any accumulated impairment loss. The Group’s investment in associates includes goodwill identified on
acquisition.
