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JAYA TIASA HOLDINGS BERHAD
Notes to the Financial Statements (cont’d)
for the financial year ended 30 June 2015
2.
Summary of significant accounting policies (cont’d)
2.4 Basis of consolidation (cont’d)
Business combinations (cont’d)
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification 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.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously
held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and
the amount recognised for non-controlling interests over the net identifiable assets acquired and liabilities
assumed. If this consideration is lower than fair value of the net assets of the subsidiary acquired, the difference
is recognised in profit or loss.
2.5 Subsidiaries
A subsidiary is an entity over which the Group has all the following:
(i)
Power over the investee (i.e existing rights that give it the current ability to direct the relevant activities
of the investee);
(ii)
Exposure, or rights, to variable returns from its investment with the investee; and
(iii)
The ability to use its power over the investee to affect its returns.
In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less
impairment losses. On disposal of such investments, the difference between net disposal proceeds and their
carrying amounts is included in profit or loss.
2.6 Investments in associates
An associate is an entity in which the Group has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but is not control or joint control over
those policies.
On acquisition of an investment in associate, any excess of the cost of investment over the Group’s share of the
net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill and included in
the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable
assets and liabilities of the investee over the cost of investment is excluded from the carrying amount of the
investment and is instead included as income in the determination of the Group’s share of the associate’s
profit or loss for the period in which the investment is acquired.
An associate is equity accounted for from the date on which the investee becomes an associate or a joint
venture.
Under the equity method, on initial recognition the investment in an associate is recognised at cost, and
the carrying amount is increased or decreased to recognise the Group’s share of the profit or loss and other
comprehensive income of the associate after the date of acquisition. When the Group’s share of losses in an
associate equal or exceeds its interest in the associate, the Group does not recognise further losses, unless
it has incurred legal or constructive obligations or made payments on behalf of the associate.
Profits and losses resulting from upstream and downstream transactions between the Group and its associate
are recognised in the Group’s financial statements only to the extent of unrelated investors’ interests in the
associate. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the
asset transferred. The financial statements of the associates are prepared as of the same reporting date as
the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of
the Group.
