Page 72 - ar2012

Notes to the Financial Statements
For the fnancial year ended 31 December 2012
3. Summary of significant accounting policies (cont’d)
3.4 Basis of consolidation and business combinations
(a) Basis of consolidation
Basis of consolidation from 1 January 2010
The consolidated fnancial statements comprise the fnancial statements of the Company and its subsidiaries as at the end
of the reporting period. The fnancial statements of the subsidiaries used in the preparation of the consolidated fnancial
statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like
transactions and events in similar circumstances.
All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions and
dividends are eliminated in full.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue
to be consolidated until the date that such control ceases.
Losses within a subsidiary are attributed to the non-controlling interest even if that results in a defcit balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the
change in ownership interest of a subsidiary results in the Group losing control over a subsidiary, it:
– De-recognises the assets (including goodwill) and liabilities of the subsidiary at their carrying amounts at the date when
controls are 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 defcit in proft or loss;
– Re-classifes the Group’s share of components previously recognised in other comprehensive income to proft or loss
or retained earnings, as appropriate.
(b) Business combinations
Business combinations from 1 January 2010
Business combinations are accounted for by applying the acquisition method. Identifable 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.
When the Group acquires a business, it assesses the fnancial assets and liabilities assumed for appropriate classifcation 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.
70