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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
NOTES TO FINANCIAL STATEMENTS
March 31, 2013
BUSINESS COMBINATIONS
- Acquisitions of subsidiaries and businesses are accounted for using the acquisition method.
The consideration for each acquisition is measured at the aggregate of the acquisition date fair values of assets given,
liabilities incurred by the Group to the former owners of the acquiree, and equity interests issued by the Group in
exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.
Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent
consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are
adjusted against the cost of acquisition where they qualify as measurement period adjustments (see below). The
subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement
period adjustments depends on how the contingent consideration is classified. Contingent consideration that is
classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted
for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent
reporting dates in accordance with FRS 39 Financial Instruments: Recognition and Measurement, or FRS 37 Provisions,
Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognised
in profit or loss.
Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are
remeasured to fair value at the acquisition date (i.e. the date the Group attains control) and the resulting gain or loss,
if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that
have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment
would be appropriate if that interest were disposed of.
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under the
FRS are recognised at their fair value at the acquisition date, except that:
• deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised
and measured in accordance with FRS 12 Income Taxes and FRS 19 Employee Benefits respectively;
• liabilities or equity instruments related to share-based payment transactions of the acquiree or the replacement
of an acquiree’s share-based payment awards transactions with share-based payment awards transactions of the
acquirer are measured in accordance with FRS 102 Share-based Payment; and
• assets (or disposal groups) that are classified as held for sale in accordance with FRS 105 Non-current Assets Held
for Sale and Discontinued Operations are measured in accordance with that Standard.
