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Notes to Financial Statements
December 31, 2014
2. Summary of Significant Accounting Policies (cont’d)
BUSINESS COMBINATIONS (cont’d)
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.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted during the measurement period (see below), or additional assets or liabilities are
recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date
that, if known, would have affected the amounts recognised as of that date.
The measurement period is the period from the date of acquisition to the date the Group obtains complete
information about facts and circumstances that existed as of the acquisition date and is subject to a maximum of one
year from acquisition date.
FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised on the Co-operative’s and Group’s statement of financial position
when the Co-operative and the Group becomes a party to the contractual provisions of the instrument.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating
interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated
future cash receipts or payments (including all fees on points paid or received that form an integral part of the effective
interest rate, transaction costs and other premiums or discounts) through the expected life of the financial instrument, or
where appropriate, a shorter period. Income and expense is recognised on an effective interest rate basis.
Financial assets
All financial assets are recognised and de-recognised on a trade date where the purchase or sale of an investment
is under a contract whose terms require delivery of the investment within the timeframe established by the market
concerned, and are initially measured at fair value plus transaction costs.
Financial assets are classified into the following specified categories: “available-for-sale” financial assets and “loans and
receivable”. The classification is determined based on the nature and purpose of financial assets at the time of initial
recognition. The Group does not have any financial assets classified as “held-to-maturity investments” and “financial
assets at fair value through profit or loss”.
