axiata group berhad | annual report 2015
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3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(a) Economic entities in the Group (continued)
(v) Associates (continued)
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables,
the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the
associate. If the associate subsequently reports profits, the Group resumes recognising its share of those profits only after its share of the
profits equals the share of losses not recognised.
Profits and losses resulting from upstream and downstream transactions between the Group and its associate are recognised in the Group’s
consolidated financial statements only to the extent of unrelated investor’s interests in the associates. Unrealised losses are eliminated
unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed
where necessary to ensure consistency with the policies adopted by the Group.
Equity accounting is discontinued when the Group ceases to have significant influence over the associates.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously
recognised in other comprehensive income is reclassified to profit or loss where appropriate.
The cost of acquiring an additional stake in an associate is added to the carrying amount of associate and equity accounted. Goodwill
arising on the purchase of additional stake is computed using fair value information at the date the additional interest is purchased. The
previously held interest is not re-measured.
Dilution gains and losses arising in investments in associates are recognised in the consolidated profit or loss.
The Group determines at each reporting date 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 difference in the consolidated profit or loss.
(b) Intangible assets
(i) Goodwill
The Group recognised goodwill based on partial goodwill method. Goodwill represents the excess of the cost of acquisition of subsidiaries
over the Group’s share of the fair value of the identifiable net assets including contingent liabilities of subsidiaries at the date of acquisition.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash generating units
(“CGUs”), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the
goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes.
Goodwill is monitored at the operating segment level.
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential
impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value
less costs to sell. Any impairment is recognised immediately as an expense and is not subsequently reversed.
