Page 107 - S P Setia Annual Report 2013
P. 107

Annual Report 2013 S P SETIA BERHAD GROUP Financial Statements | 105



1. SiGniFicant accOUntinG POlicieS (cOnt’D)

(f) Basis of consolidation (cont’d)
Non-controlling interests are that part of the net results of operations and of net assets of a subsidiary attributable to the interests which
are not owned directly or indirectly by the shareholders of the Company. They are shown separately in the consolidated statement of
comprehensive income, statement of changes in equity and statement of fnancial position. Total comprehensive income is attributed
to the non-controlling interests based on their respective interests in a subsidiary, even if this results in the non-controlling interests
having a defcit balance.

When a change in the Company’s ownership interest in a subsidiary results in a loss of control over the subsidiary, the assets and
liabilities of the subsidiary including any goodwill are derecognised. Amounts recognised in other comprehensive income in respect of
that entity are also reclassifed to proft or loss or transferred directly to retained earnings if required by a specifc Standard.

Any retained interest in the entity is remeasured at fair value. The difference between the carrying amount of the retained investment
at the date when control is lost and its fair value is recognised in proft or loss.
Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control over the subsidiary are accounted
for as transactions with equity owners of the Group. Any difference between the change in the carrying amounts of the non-controlling
interest and the fair value of the consideration paid or received is recognised in retained earnings within equity attributable to the
shareholders of the Company.

(g) associated companies

An associated company is an entity in which the Group has signifcant infuence and that is neither a subsidiary company nor an interest
in a joint venture. Signifcant infuence is the power to participate in the fnancial and operating policy decisions of the investee, but
is not control or joint control over those policies. The existence and effect of potential voting rights that are currently exercisable or
convertible are considered when assessing whether the Group has signifcant infuence.

In the Company’s separate fnancial statements, investments in associated companies are stated at cost less impairment losses.
Impairment losses are recognised in proft or loss.
On disposal, the difference between the net disposal proceeds and the carrying amount of the associated company is included in proft
or loss.
Investments in associated companies are accounted for in the consolidated fnancial statements by the equity method of accounting.
Under the equity method, the investments in associated companies are initially recognised at cost and adjusted thereafter for post-
acquisition changes in the Group’s share of net assets of the associated companies.
The Group’s share of net profts or losses and changes recognised directly in the equity of the associated companies are recognised in
the consolidated proft or loss and consolidated statement of changes in equity, respectively.

An investment in an associated company is accounted for using the equity method from the date on which the Group obtains signifcant
infuence until the date the Group ceases to have a signifcant infuence over the associated company.

Premium relating to an associated company is included in the carrying value of the investment and it is not tested for impairment
separately. Instead, the entire carrying amount of the investment is tested for impairment in accordance with the accounting policy set
out in 1(r)(iii) below.

Discount on acquisition is excluded from the carrying amount of the investment and is instead included as income in the determination
of the Group’s share of the associated company’s proft or loss in the period in which the investment is acquired.
Unrealised gains on transactions between the Group and its associated companies are eliminated to the extent of the Group’s interest
in the associated companies. Unrealised losses are also eliminated unless the transaction provides evidence of impairment of the asset
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