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annual report | 2012 Gunung Capital Berhad (330171-P) 54 NOTES TO THE FINANCIAL STATEMENTS (cont’d) 31 DECEMBER 2012 2 SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.4 Summary of Significant Accounting Policies (a) Basis of Consolidation The consolidated financial statements incorporate the audited financial statements of the Company and its subsidiaries made up to the same financial year. Subsidiaries are companies in which the Group has the power to exercise control over the financial and operating policies so as to obtain benefits from their activities, generally accompanying a shareholding of more than one half of the voting rights. Subsidiaries are consolidated from the date on which control is transferred to the Group and are de-consolidated from the date control ceases. The financial statements of subsidiaries are prepared for the same reporting period as the Company, and uniform accounting policies are adopted in the financial statements for like transactions and events in similar circumstances. Acquisitions of subsidiaries are accounted for using the acquisition method. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition related costs are recognised as expenses in the periods in which the costs are incurred and the services are received. In business combinations achieved in stages, previously held equity interests in the acquiree are re-measured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss. The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree net identifiable assets. Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is reflected as goodwill in the statement of financial position. The accounting policy for goodwill is set out in Note 2.4(c). In instances where the latter amount exceeds the former, the excess is recognised as a gain on bargain purchase in profit or loss on the acquisition date. All intra-group transactions, balances and resulting unrealised gains are eliminated on consolidation and the consolidated financial statements reflect external transactions only. Unrealised losses are eliminated on consolidation unless cost cannot be recovered. The gain or loss on disposal of a subsidiary is the difference between net disposal proceeds and the Group’s share of its assets together with any unamortised balance of goodwill. (b) Transactions with Non-Controlling Interests Non-controlling interests represent the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and is presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position, separately from equity attributable to owners of the Company. Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are 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 relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the parent.
NOTES TO THE FINANCIAL STATEMENTS (cont’d) 31 DECEMBER 2012 2 SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.4 Summary of Significant Accounting Policies (cont’d) (c) Goodwill on Consolidation Goodwill is initially recognised as an asset at cost and subsequently measured at cost less accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (“CGU”) expected to benefit from the synergies of the combination. CGU to which goodwill has been allocated are test for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the CGU is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit on a pro-rata basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill shall not be reversed in a subsequent period. On disposal of a subsidiary company, the attributable amount of goodwill is included in the determination of the gain or loss on disposal. (d) Investments in Subsidiaries In the Company’s separate financial statements, investments in subsidiaries are stated at cost less impairment losses, if any. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is taken up in the income statement. (e) Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Certain land and buildings of the Group are shown at valuation less subsequent depreciation and impairment losses. The directors have not adopted a policy of regular valuation, and have applied the transitional provisions of MFRS 1, First-time adoption of MFRS which permits these assets to be stated at their prevailing valuations less depreciation. The valuations were initially determined by independent professional valuers on the open market basis, and no later valuations were recorded in the financial statements. Surpluses arising from revaluation are dealt with in the property revaluation reserve. Any deficit arising is offset against the revaluation reserve to the extent of a previous increase for the same property. In all other cases, a decrease in carrying amount will be charged to the profit or loss. Depreciation is calculated to write off the cost of the property, plant and equipment to their residual values on the straight line method over their expected useful lives. Freehold land is not amortised. Long-leasehold land is amortised evenly over its applicable lease period. The annual rates used for other assets are as follows: % Buildings 2 Plant and machinery 10 - 20 Motor vehicles 14 - 20 Furniture, fittings and equipment 10 - 20 Gunung Capital Berhad (330171-P) 55 annual report | 2012
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(Source: CEO of Gunung Capital Bhd,
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Notes:- 1. A member of the Company,
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