139 / 232
Annual Report 2017
137
Notes to the
financial statements
31 march 2017
2.
Significant accounting policies (cont’d.)
2.3 Summary of significant accounting policies (cont’d.)
(b)
Transaction with non-controlling interests (cont’d.)
Losses applicable to the non-controlling interest in a subsidiary company are allocated to the non-controlling
interests even if doing so causes the non-controlling interests to have a deficit balance.
The Group treats all changes in its ownership interest in a subsidiary company that do not result in a loss of control
as equity transactions between the Group and its non-controlling interest holders. Any difference between the
Group’s share of net assets before and after the change, and any consideration received or paid, is adjusted to or
against Group reserves.
(c)
Investment in associate companies
An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. An
associate is equity accounted for from the date the Group obtains significant influence until the date the Group
ceases to have significant influence over the associate.
The Group’s investment in associate are accounted for using the equity method. Under the equity method, the
investment in associate is measured in the statement of financial position at cost plus post-acquisition changes in
the Group’s share of net assets of the associate. Goodwill relating to associate is included in the carrying amount of
the investment. Any excess of the Group’s share of the net fair value of the associate’s identifiable assets, liabilities
and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment
and is instead included as income in the determination of the Group’s share of the associate’s profit or loss for the
period in which the investment is acquired.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any
long-term interests that, in substance, form part of the Group’s net investment in the associates, the Group does not
recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.
After application of the equity method, the Group determines whether it is necessary to recognise an additional
impairment loss on the Group’s investment in its associates. The Group determines at each reporting date whether
there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group
calculates the amount of impairment as the difference between the recoverable amount of the associate and its
carrying value and recognises the amount in profit or loss.
The financial statements of the associated company are prepared as of the same reporting date as the Company.
Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.
In the Company’s separate financial statements, investments in associate are stated at cost less impairment losses.
On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is
included in profit or loss.
The most recent available audited financial statements of the associates are used by the Group in applying the
equity method. Where the dates of the audited financial statements used are not coterminous with those of the
Group, the share of results is arrived at from the last audited financial statements available andmanagement financial
statements to the end of the accounting period. Uniform accounting policies are adopted for like transactions and
events in similar circumstances.