2. Significant accounting policies (CONT’D.)
2.5 Summary of significant accounting policies (cont’d.)
(a) Basis of consolidation (cont’d.)
Change in ownership interest of Subsidiaries
Changes in the Group’s equity interest in a Subsidiary that do not result in the Group losing control
over the Subsidiary is accounted for as equity transactions. In such circumstances, the carrying
amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their
respective interests in the Subsidiary. Any difference between the amount bywhich the non-controlling
interest is adjusted and the fair value of the consideration paid or received is recognised directly in
shareholders’ equity.
If the Group loses control over a Subsidiary, at the date the Group loses control, it:
- Derecognises the assets (including goodwill) and liabilities of the Subsidiary at their respective
carrying amounts.
- Derecognises the carrying amount of any non-controlling interest.
- Derecognises the cumulative translation differences recorded in equity.
- Recognises the fair value of the consideration or distribution received.
- Recognises the fair value of any investment retained.
- Recognises any surplus or deficit in profit or loss.
- Reclassifies the parent’s share of components previously recognised in other comprehensive
income to profit or loss or retained earnings, as appropriate.
The fair value of any investment retained in the former Subsidiary at the date control is lost is regarded
as the cost on initial recognition of the investment.
Business combinations under common control
Business combinations involving entities under common control are accounted for by applying the
pooling of interest method which involves the following:
- The assets and liabilities of the combining entities are reflected at their carrying amounts reported
in the consolidated financial statements of the controlling holding company.
- No adjustments are made to reflect the fair values on the date of combination, or recognise any
new assets or liabilities.
- No additional goodwill is recognised as a result of the combination.
- Any differences between the consideration paid/transferred and the equity ‘acquired’ is reflected
within the equity as merger reserve.
The Group has elected no restatement of financial information in the consolidated financial statements
for the periods prior to the combination of entities under common control.
Investment in Subsidiaries - separate financial statements
In the Company’s separate financial statements, investments in Subsidiaries are accounted for at cost
less any impairment charges. Dividends received from Subsidiaries are recorded as a component of
revenue in the Company’s separate income statement.
n otes to th e f i nan c i a l statements
Bo ustead plantati o ns Berhad
76
