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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)
Business Combinations
Acquisitions of subsidiaries are accounted for using the acquisition method. The cost of
an acquisition is measured as the aggregate of the consideration transferred, measured at
acquisition date fair value and the amount of any non-controlling interests in the acquiree.
The Group elects on a transaction-by-transaction basis whether to measure the non-
controlling interests in the acquiree either at fair value or at the proportionate share of the
acquiree’s identifiable net assets. Transaction costs incurred are expensed and included in
administrative expenses.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value
at the acquisition date. Subsequent changes in the fair value of the contingent consideration
which is deemed to be an asset or liability, will be recognised in accordance with FRS 139
either in profit or loss or as a change to other comprehensive income. If the contingent
consideration is classified as equity, it will not be remeasured. Subsequent settlement is
accounted for within equity. In instances where the contingent consideration does not fall
within the scope of FRS 139, it is measured in accordance with the appropriate FRS.
When the Group acquires a business, it assesses the financial assets and liabilities assumed
for appropriate classification and designation in accordance with the contractual terms,
economic circumstances and pertinent conditions as at the acquisition date. This includes
the separation of embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, the acquisition date of the acquirer’s
previously held equity interest in the acquiree is remeasured to fair value at the acquisition
date through profit or loss.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration
transferred and the amount recognised for non-controlling interests over the net identifiable
assets acquired and liabilities assumed. If this consideration is lower than fair value of the net
assets of the subsidiary company acquired, the difference is recognised in profit or loss. The
accounting policy for goodwill is set out in Note 2.3(e).
(b) Transaction with Non-controlling Interests
Non-controlling interests at the reporting date, being the portion of the net assets of subsidiary
companies attributable to equity interests that are not owned by the Company, whether directly or
indirectly through subsidiary companies, are presented in the consolidated statement of financial
position and statement of changes in equity within equity, separately from equity attributable to
the equity shareholders of the Company. Non-controlling interests in the results of the Group are
presented in the consolidated statement of profit or loss and other comprehensive income as
an allocation of the profit or loss and the comprehensive income for the year between the non-
controlling interests and the equity shareholders of the Company.