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Notes to Financial Statements
December 31, 2014
2. Summary of Significant Accounting Policies (cont’d)
ASSOCIATES (cont’d)
The Group discontinues the use of the equity method from the date when the investment ceases to be an associate, or
when the investment is classified as held for sale. When the Group retains an interest in the former associate and the
retained interest is a financial asset, the Group measures the retained interest at fair value at that date and the fair value
is regarded as its fair value on initial recognition in accordance with FRS 39. The difference between the carrying amount
of the associate at the date the equity method was discontinued, and the fair value of any retained interest and any
proceeds from disposing of a part interest in the associate is included in the determination of the gain or loss on disposal
of the associate. In addition, the Group accounts for all amounts previously recognised in other comprehensive income
in relation to that associate on the same basis as would be required if that associate had directly disposed of the related
assets or liabilities. Therefore, if a gain or loss previously recognised in other comprehensive income by that associate
would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or
loss from equity to profit or loss (as a reclassification adjustment) when the equity method is discontinued.
When the Group reduces its ownership interest in an associate but the Group continues to use the equity method,
the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognised in other
comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit
or loss on the disposal of the related assets or liabilities.
Where a Group entity transacts with an associate of the Group, profits and losses resulting from the transactions with
the associate are recognised in the Group’s consolidated financial statements only to the extent of the interests in the
associate that are not related to the Group.
GOODWILL
Where applicable, goodwill arising in a business combination is recognised as an asset at the date that control is acquired
(the acquisition date). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any
non-controlling interest in the acquiree and the fair value of the acquirer’s previously held equity interest (if any) in the
entity over net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.
If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the
consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s
previously held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain
purchase gain.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to
benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested
for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable
amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the
carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent
period.
On disposal of a subsidiary or the relevant cash-generating unit, the attributable amount of goodwill is included in the
determination of the profit or loss on disposal.
