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(11817-V) |

Annual Report



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


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.