Page 106 - S P Setia Annual Report 2013
P. 106

104 | Financial Statements S P SETIA BERHAD GROUP Annual Report 2013





NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 OCTOBER 2013 (CONT’D)






1. SiGniFicant accOUntinG POlicieS (cOnt’D)

(e) Subsidiary companies (cont’d)
In the Company’s separate fnancial statements, investment in subsidiary companies are stated at cost less impairment losses.
Impairment losses are charged to proft or loss.
On disposal, the difference between the net disposal proceeds and the carrying amount of the subsidiary company disposed off is
taken to proft or loss.

(f) Basis of consolidation

The consolidated fnancial statements incorporate the fnancial statements of the Company and of all its subsidiary companies and
jointly controlled entities made up to the end of the fnancial year. The consolidated fnancial statements are prepared using uniform
accounting policies for like transactions in similar circumstances.

All intra-group balances, transactions, income and expenses are eliminated in full on consolidation and the consolidated fnancial
statements refect external transactions only.

All subsidiary companies and jointly controlled entities are consolidated on the purchase method of accounting from the date of
acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases
except for Syarikat Kemajuan Jerai Sdn Bhd and Wawasan Indera Sdn Bhd which are consolidated using the pooling-of-interest method
of accounting.

Under the pooling-of-interest method of accounting, the results of entities or businesses under common control are accounted for as
if the acquisition had occurred at the date that common control was established. The assets and liabilities acquired are included in the
consolidated statements of fnancial position at their existing carrying amounts.
Under the purchase method of accounting, the cost of an acquisition is measured as the aggregate of the fair values of the assets
given, liabilities incurred or assumed and equity instruments issued at the date of exchange, plus any costs directly attributable to
the acquisition. Identifable assets acquired and liabilities and contingent liabilities assumed are measured at their fair values at the
acquisition date.
The consideration transferred for the acquisition of a subsidiary comprises the fair value of the assets transferred, the liabilities incurred
and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration
arrangement and the fair value of any pre-existing equity interest in the subsidiary.

Acquisition-related costs are expensed as incurred.
Identifable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions,
measured initially at their fair values at the acquisition date.

On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date of acquisition
either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifable assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair
value of any previous equity interest in the acquiree over the fair value of the net identifable assets acquired is recorded as goodwill.
Any excess of the Group’s share in the net fair value of the acquired subsidiary’s identifable assets, liabilities and contingent liabilities
over the cost of business combination is recognised as income in proft or loss on the date of acquisition.
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