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Kumpulan Fima Berhad
(11817-V)
136
Notes to the
financial statements
31 march 2017
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 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.
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.