INDOFOOD AGRI RESOURCES LTD
ANNUAL REPORT 2015
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For the financial year ended 31 December 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.11 Impairment of non-financial assets (cont’d)
For assets excluding goodwill, an assessment is made at each annual reporting period as to whether there is any
indication that previously recognised impairment losses recognised for an asset may no longer exist or may have
decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously
recognised impairment loss for an asset other than goodwill is reversed only if there has been a change in the estimates
used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the
carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying
amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset
previously. Such reversal is recognised in the profit or loss.
2.12 Subsidiaries
A subsidiary is an investee that is controlled by the Group. The Group controls an investee when it is exposed, or has
the rights, to variable returns from its involvement with the investee and has the ability to affect those returns through
its power over the investee.
In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment
losses.
2.13 Associates
An associate is an entity over which the Group has the power to participate in the financial and operating policy decisions
of the investee but does not have control or joint control of those policies.
The Group accounts for its investment in associates using the equity method from the date on which it becomes an
associate.
Under the equity method, the investment in associates are carried in the balance sheet at cost plus post-acquisition
changes in the Group’s share of net assets of the associates. The profit or loss reflects the share of results of the
operations of the associates. Goodwill relating to the associate is included in the carrying amount of the investment and
is neither amortised nor individually tested for impairment. Any excess of the Group’s share of the net fair value of the
associate’s identifiable assets and liabilities over the cost of the investment is included as income in the determination
of the Group’s share of the associate’s profit or loss in the period in which the investment is acquired.
Where there has been a change recognised in other comprehensive income by the associates, the Group recognises
its share of such changes in other comprehensive income. Unrealised gains and losses resulting from transactions
between the Group and the associates are eliminated to the extent of the interest in the associates.
The Group’s share of the profit or loss of its associates is the profit attributable to equity holders of the associates and,
therefore is the profit or loss after tax and non-controlling interest in the subsidiaries of associates.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, 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 associate. The Group determines at the end of each reporting period
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 associates are prepared as the same reporting date as the Company. Where necessary,
adjustments are made to bring the accounting policies in line with those of the Group.
