54
SUNNINGDALE TECH LTD
ANNUAL REPORT 2014
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2014
NOTES TO THE FINANCIAL STATEMENTS
2.
Summary of significant accounting policies (cont’d)
2.4
Basis of consolidation and business combinations (cont’d)
(a)
Basis of consolidation (cont’d)
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it:
-
de-recognises the assets (including goodwill) and liabilities of the subsidiary at their carrying amounts at the date
when control is lost;
-
de-recognises the carrying amount of any non-controlling interest;
-
de-recognises the cumulative translation differences recorded in equity;
-
recognises the fair value of the consideration received;
-
recognises the fair value of any investment retained;
-
recognises any surplus or deficit in profit or loss;
-
re-classifies the Group’s share of components previously recognised in other comprehensive income to profit or
loss or retained earnings, as appropriate.
(b)
Business combinations and goodwill
Business combinations are accounted for by applying the acquisition method. Identifiable assets acquired and liabilities
assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related
costs are recognised as expenses in the periods in which the costs are incurred and the services are received.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be
recognised in profit or loss.
The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any)
that are present ownership interests and entitle their holders to a proportionate share of net assets in the event of
liquidation, is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of
the acquiree’s identifiable net assets. Other components of non-controlling interests are measured at their acquisition
date fair value, unless another measurement basis is required by another FRS.
Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of
non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the
acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill. In
instances where the latter amount exceeds the former, the excess is recognised as gain on bargain purchase in profit
or loss on the acquisition date.
Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less any accumulated
impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date,
allocated to the Group’s cash-generating units that are expected to benefit from the synergies of the combination,
irrespective of whether other assets or liabilities of the acquire are assigned to those units.
The cash-generating units to which goodwill have been allocated is treated for impairment annually and whenever there
is an indication that the cash-generating unit may be impaired. Impairment is determined for goodwill by assessing
the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the goodwill relates.
