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KUMPULAN FIMA BERHAD
(11817-V) |
Annual Report
2016
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.3 Summary of Significant Accounting Policies (Cont’d)
(a) Subsidiaries and Basis of Consolidation (Cont’d)
(ii) Basis of Consolidation (cont’d)
When the Company has less than a majority of the voting rights of an investee, the Company
considers the following in assessing whether or not the Company’s voting rights in an investee
are sufficient to give it power over the investee:
(i) The size of the Company’s holding of voting rights relative to the size and dispersion of
holdings of the other vote holders;
(ii) Potential voting rights held by the Company, other vote holders or other parties;
(iii) Rights arising from other contractual arrangements; and
(iv) Any additional facts and circumstances that indicate that the Company has, or does not
have, the current ability to direct the relevant activities at the time that decisions need to
be made, including voting patterns at previous shareholders’ meetings.
Subsidiary companies are consolidated when the Company obtains control over the subsidiary
company and ceases when the Company loses control of the subsidiary company. All intra-
group balances, income and expenses and unrealised gains and losses resulting from intra-
group transactions are eliminated in full.
Losses within a subsidiary company are attributed to the non-controlling interests even if that
results in a deficit balance.
Changes in the Group’s ownership interests in subsidiary companies that do not result in
the Group losing control over the subsidiaries are accounted for as equity transactions. The
carrying amounts of the Group’s interests and the non-controlling interests are adjusted
to reflect the changes in their relative interests in the subsidiary company. The resulting
difference is recognised directly in equity and attributed to owners of the Company.
When the Group loses control of a subsidiary company, a gain or loss calculated as the
difference between (i) the aggregate of the fair value of the consideration received and the
fair value of any retained interest and (ii) the previous carrying amount of the assets and
liabilities of the subsidiary company and any non-controlling interest, is recognised in profit or
loss. The subsidiary company’s cumulative gain or loss which has been recognised in other
comprehensive income and accumulated in equity are reclassified to profit or loss or where
applicable, transferred directly to retained earnings. The fair value of any investment retained
in the former subsidiary company at the date control is lost is regarded as the cost on initial
recognition of the investment.