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FINANCIAL STATEMENTS
Axiata Group Berhad | Annual Report 2016
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3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(a) Economic entities in the Group (continued)
(v) Associates
Associates are all entities over which the Group has significant influence, but no control or joint 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 using the equity method of accounting. Under the equity method, the investment in an
associate is initially recognised at cost, and adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses
of the associate in profit or loss, and the Group’s share of movements in OCI of the associate in OCI. Dividends received or receivable
from an associate are recognised as a reduction in the carrying amount of the investment. When the Group’s share of losses in an
associate equals or exceeds its interests in the associate, including any long-term interests that, in substance, form part of the Group’s
net investment in the associate, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or
made payments on behalf of the associate. The Group’s investment in associates includes goodwill identified on acquisition.
The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired.
An impairment loss is recognised for the amount by which the carrying amount of the associate exceeds its recoverable amount.
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.
When the Group ceases to equity account its associate because of a loss of significant influence, any retained interest in the entity is
remeasured to its fair value with the change in carrying amount recognised in profit or loss. This fair value becomes the initial carrying
amount for the purposes of subsequently accounting for the retained interest as a financial asset. In addition, any amount previously
recognised in OCI in respect of the entity is accounted for as if the Group had directly disposed of the related assets or liabilities. This
may mean that amounts previously recognised in OCI are reclassified to profit or loss.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts
previously recognised in OCI is reclassified to profit or loss where appropriate.
Dilution gains and losses arising in investments in associates are recognised in profit or loss.
The cost of an associate acquired in stages is measured as the sum of the fair value of the interest previously held plus the fair value of
any additional consideration transferred as of the date when the investment became an associate. Any gain or loss on re-measurement
of the previously held stake is taken to profit or loss and any OCI recognised in prior periods in relation to the previously held stake in
the acquired associate is also recognised in profit or loss.
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.
Any acquisition-related costs are expensed in the periods in which the costs are incurred.
(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 and fair value of any pre-existing equity interest in the subsidiaries. Any shortfall is recognised in profit or loss.