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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)
2.13 Associates (cont’d)
Upon loss of significant influence over the associate, the Group measures and recognises the retained interest at fair
value. Any difference between the fair value of the aggregate of the retained interest and proceeds from disposal and
the carrying amount of the investment at the date the equity method was discontinued is recognised in profit or loss.
2.14 Joint venture
A joint venture is a contractual arrangement whereby two or more parties have joint control and provides the right to
the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which
exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.
The Group recognises its interest in the joint venture as an investment and accounts for the investment using the equity
method from the date on which it becomes a joint venture.
On acquisition of the investment, any excess of the cost of the investment over the Group’s share of the net fair value of
the investee’s identifiable assets and liabilities is accounted as goodwill and is included in the carrying amount of the
investment. Any excess of the Group’s share of the net fair value of the investee’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 joint venture’s profit
or loss in the period in which the investment is acquired.
Under the equity method, the investment in joint venture is carried in the balance sheet at cost plus post-acquisition
changes in the Group’s share of net assets of the joint venture. Goodwill relating to the joint venture 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 joint venture’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 joint venture’s profit or loss in the period in which
the investment is acquired.
The financial statements of the joint venture 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.
Upon loss of joint control over the joint venture, the Group measures the retained interest at fair value. Any difference
between the fair value of the aggregate of the retained interest and proceeds from disposal and the carrying amount of
the investment at the date the equity method was discontinued is recognised in profit or loss.
2.15 Financial instruments
(a)
Financial assets
Initial recognition and measurement
Financial assets are recognised when, and only when, the Group becomes a party to the contractual provisions
of the financial instrument. The Group determines the classification of its financial assets at initial recognition.
When financial assets are recognised initially, they are measured at fair value plus, in the case of financial
assets not at fair value through profit or loss, directly attributable transaction costs.
