2. Significant accounting policies
The accounting policies set out below have been applied consistently to the periods presented in these
financial statements, unless otherwise stated.
(a) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Company. The financial statements of subsidiaries
are included in the consolidated financial statements from the date that control
commences until the date that control ceases.
The Group controls an entity when it is exposed, or has rights, to variable returns from
its involvement with the entity and has the ability to affect those returns through its power
over the entity. Potential voting rights are considered when assessing control only when
such rights are substantive. The Group also considers it has de facto power over an
investee when, despite not having the majority of voting rights, it has the current ability to
direct the activities of the investee that significantly affect the investee’s return.
Investments in subsidiaries are measured in the Company’s statement of financial position
at cost less any impairment losses, unless the investment is classified as held for sale or
distribution. The cost of investments includes transaction costs.
The accounting policies of subsidiaries are changed when necessary to align them with
the policies adopted by the Group.
(ii) Accounting for business combinations
Business combinations are accounted for using the acquisition method from the acquisition
date, which is the date on which control is transferred to the Group.
Acquisitions on or after 1 January 2011
For acquisitions on or after 1 January 2011, the Group measures the cost of goodwill at
the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests in the acquiree; plus
• if the business combination is achieved in stages, the fair value of the existing equity
interest in the acquiree; less
• the net recognised amount (generally fair value) of the identifiable assets acquired and
liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit
or loss.
For each business combination, the Group elects whether it measures the non-controlling
interests in the acquiree either at fair value or at the proportionate share of the acquiree’s
identifiable net assets at the acquisition date.
Transaction costs, other than those associated with the issue of debt or equity securities,
that the Group incurs in connection with a business combination are expensed as incurred.
Notes to the Financial Statements
SARAWAK PLANTATION BERHAD
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Annual Report 2014
