Page 73 - 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 (cont’d)
(b) Business combinations (cont’d)
Business combinations from 1 January 2010 (cont’d)
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
accordance with FRS 39 either in proft or loss or as a change to other comprehensive income. If the contingent consideration
is classifed as equity, it is not remeasured until it is fnally settled within equity.
In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at
the acquisition date and any corresponding gain or loss is recognised in proft or loss.
The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is
recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree’s
identifable net assets.
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 identifable assets and liabilities is recorded as goodwill. The accounting policy
for goodwill is set out in Note 3.10(a). In instances where the latter amount exceeds the former, the excess is recognised as
gain on bargain purchase in proft or loss on the acquisition date.
Business combinations prior to 1 January 2010
In comparison to the above mentioned requirements, the following differences applied:
Business combinations are accounted for by applying the purchase method. Transaction costs directly attributable to the
acquisition formed part of the acquisition costs. The non-controlling interest (formerly known as minority interest) was
measured at the proportionate share of the acquiree’s identifable net assets.
Business combinations achieved in stages were accounted for as separate steps. Adjustments to those fair values relating to
previously held interests are treated as a revaluation and recognised in equity. Any additional acquired share of interest did
not affect previously recognised goodwill.
When the Group acquired a business, embedded derivatives separated from the host contract by the acquiree were not
reassessed on acquisition unless the business combination resulted in a change in the terms of the contract that signifcantly
modifed the cash fows that otherwise would have been required under the contract.
Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic outfow was more
likely than not and a reliable estimate was determinable. Subsequent adjustments to the contingent consideration were
recognised as part of goodwill.
3.5 Transactions with non-controlling interests
Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and
are presented separately in the consolidated statement of comprehensive income and within equity in the consolidated balance
sheet, separately from equity attributable to owners of the Company.
Indofood Agri Resources Ltd. • Annual Report 2012 71