94
ANNUAL REPORT 2016
NOTES TOTHE FINANCIAL STATEMENTS
30 JUNE 2016
(Continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.3 Business combinations
Business combinations are accounted for by applying the acquisition method of accounting.
Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured at their fair value at
the acquisition date, except that:
(a)
deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured
in accordance with MFRS 112
Income Taxes
and MFRS 119
Employee Benefits
respectively;
(b)
liabilities or equity instruments related to share-based payment transactions of the acquiree or the replacements by the Group
of an acquiree’s share-based payment transactions are measured in accordance with MFRS 2
Share-based Payment
at the
acquisition date; and
(c)
assets (or disposal groups) that are classified as held for sale in accordance with MFRS 5
Non-current Assets Held for Sale and
Discontinued Operations
are measured in accordance with that Standard.
Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the serviced are received.
Any contingent consideration payable is recognised at fair value at the acquisition date. Measurement period adjustments to contingent
consideration are dealt with as follows:
(a)
If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity.
(b)
Subsequent changes to contingent consideration classified as an asset or liability that is a financial instrument within the scope
of MFRS 139 are recognised either in profit or loss or in other comprehensive income in accordance with MFRS 139. All other
subsequent changes are recognised in profit or loss.
In a business combination achieved in stages, previously held equity interests in the acquiree are re-measured to fair value at the
acquisition date and any corresponding gain or loss is recognised in profit or loss.
Components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to a proportionate
share of the entity’s net assets in the event of liquidation are initially measured at the present ownership instruments’ proportionate
share in the recognised amounts of the acquiree’s identifiable net assets. All other components of non-controlling interests shall be
measured at their acquisition-date fair values, unless another measurement basis is required by MFRSs. The choice of measurement
basis is made on a combination-by-combination basis. Subsequent to initial recognition, the carrying amount of non-controlling
interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity.
Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling
interest in the acquiree (if any), and the fair value of the previously held equity interest of the Group in the acquiree (if any), over
the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill in the statement of financial position. The
accounting policy for goodwill is set out in Note 4.8(a) to the financial statements. In instances where the latter amount exceeds the
former, the excess is recognised as a gain on bargain purchase in profit or loss on the acquisition date.
4.4 Property, plant and equipment and depreciation
All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that is directly attributable to the
acquisition of the asset.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is
incurred and it is probable that the future economic benefits associated with the asset would flow to the Group and the cost of the
asset could be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing
of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling
and removing the asset and restoring the site on which it is located for which the Group is obligated to incur when the asset is
acquired, if applicable.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the asset and which
has different useful life, is depreciated separately.
