Page 118 - S P Setia Annual Report 2016

 

 

 

 

 

Page 118 - S P Setia Annual Report 2016
P. 118

116   S P Setia Berhad Group
                Annual Report 2016




          Notes To The Financial Statements

          For The Financial Year Ended 31 December 2016

          1.   SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)

              (f)   Investments in associated companies and jointly controlled entities

                   An associated company is an entity in which the Group has significant influence and that is neither a subsidiary company nor an
                   interest in a joint arrangement. Significant influence is the power to participate in the financial 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 significant influence.

                   A jointly controlled entity is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the
                   net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists
                   only when decisions about the relevant activities require unanimous consent of the parties sharing control.

                   In the Company’s separate financial statements, investments in associated companies and jointly controlled entities are stated at
                   cost less impairment losses. Impairment losses are recognised in profit or loss.

                   On disposal, the difference between the net disposal proceeds and the carrying amount of the associated companies and the
                   jointly controlled entities are included in profit or loss.

                   Investments in associated companies and jointly controlled entities are accounted for in the consolidated financial statements
                   by the equity method of accounting. Under the equity method, the investments in associated companies and jointly controlled
                   entities are initially recognised at cost and adjusted thereafter for post-acquisition changes in the Group’s share of net assets of
                   the associated companies and jointly controlled entities. Distribution received from associated companies and jointly controlled
                   entities reduce the carrying amount of the investment. Where there has been change recognised in other comprehensive
                   income by the associated companies and jointly controlled entities, the Group recognised its share of such changes in other
                   comprehensive income.

                   An investment in an associated company or a jointly controlled entity is accounted for using the equity method from the date on
                   which the Group obtains significant influence or joint control until the date the Group ceases to have a significant influence or
                   joint control over the associated company or jointly controlled entity.

                   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 companies’ or jointly controlled entities’ profit or loss in the period in which
                   the investment is acquired.

                   Unrealised gains on transactions between the Group and its associated companies or jointly controlled entities are eliminated to
                   the extent of the Group’s interest in the associated companies or jointly controlled entities. Unrealised losses are also eliminated
                   unless the transaction provides evidence of impairment of the asset transferred.

                   Equity accounting is discontinued when the carrying amount of the investment in an associated company or a jointly controlled
                   entity diminishes by virtue of losses to zero, unless the Group has incurred legal or constructive obligations or made payments
                   on behalf of the associated company or the jointly controlled entity.

                   The results and reserves of associated companies or jointly controlled entities are accounted for in the consolidated financial
                   statements based on audited and/or unaudited management financial statements made up to the end of the financial year and
                   prepared using accounting policies that conform to those used by the Group for like transactions in similar circumstances.

                   When changes in the Group’s interests in an associated company do not result in a loss of significant influence, the retained
                   interests in the associated company are not remeasured. Any gain or loss arising from the changes in the Group’s interests in the
                   associated company is recognised in profit or loss.

                   When the Group ceases to have significant influence over an associated company, any retained interest in the former associated
                   company is recognised at fair value on the date when significant influence is lost. Any gain or loss arising from the loss of
                   significant influence over an associated company is recognised in profit or loss.
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