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Notes to the
Financial Statements
As at 31 March 2019
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 ismeasuredas the aggregateof the consideration transferred, measuredat 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 off 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 MFRS 9 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 MFRS 9, it is measured in accordance with the appropriate
MFRS.
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.
Kumpulan Fima Berhad
(11817-V)
Annual Report 2019
128