97
ANNUAL REPORT 2016
NOTES TOTHE FINANCIAL STATEMENTS
30 JUNE 2016
(Continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.7 Investments (continued)
(b)
Associates
An associate is an entity over which the Group and the Company have significant influence and that is neither a subsidiary
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 neither control nor joint control over those policies.
In the separate financial statements of the Company, an investment in associate is stated at cost less impairment losses.
An investment in associate is accounted for in the consolidated financial statements using the equity method of accounting. The
investment in associate in the consolidated statement of financial position is initially recognised at cost and adjusted thereafter
for the post acquisition change in the share of net assets of the investments of the Group.
The interest in an associate is the carrying amount of the investment in the associate under the equity method together with any
long term interest that, in substance, form part of the net investment in the associate of the Group.
The share of the profit or loss of the associate by the Group during the financial year is included in the consolidated financial
statements, after adjustments to align the accounting policies with those of the Group, from the date that significant influence
commences until the date that significant influence ceases. Distributions received from the associate reduce the carrying
amount of the investment. Adjustments to the carrying amount could also be necessary for changes in the proportionate interest
of the Group in the associate arising from changes in the associate’s equity that have not been recognised in the associate’s profit
or loss. Such changes include those arising from the revaluation of property, plant and equipment and from foreign exchange
translation differences. The share of those changes by the Group is recognised directly in equity of the Group.
Unrealised gains and losses on transactions between the Group and the associate are eliminated to the extent of the interest of
the Group in the associate to the extent that there is no impairment.
When the share of losses of the Group in the associate equals to or exceeds its interest in the associate, the carrying amount
of that interest is reduced to nil and the Group does not recognise further losses unless it has incurred legal or constructive
obligations or made payments on its behalf.
The most recent available financial statements of the associate are used by the Group in applying the equity method. When
the end of the reporting periods of the financial statements are not coterminous, the share of results is arrived at using the latest
financial statements for which the difference in end of the reporting periods is no more than three (3) months. Adjustments are
made for the effects of any significant transactions or events that occur between the intervening periods.
When the Group ceases to have significant influence over an associate, any retained interest in the former associate at the
date when significant influence is lost is measured at fair value and this amount is regarded as the initial carrying amount of a
financial asset. The difference between the fair value of any retained interest plus proceeds from the interest disposed of and the
carrying amount of the investment at the date when equity method is discontinued is recognised in the profit or loss.
When the interest of the Group in an associate decreases but does not result in a loss of significant influence, any retained
interest is not re-measured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any gains or
losses previously recognised in other comprehensive income are also reclassified proportionately to the profit or loss if that gain
or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.
4.8 Intangible assets
(a)
Goodwill
Goodwill recognised in a business combination is an asset at the acquisition date and is initially measured at cost being 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 interest of the Group 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.
