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2. SIGNIFICANT ACCOuNTING pOlICIES
Masterskill Education Group Berhad / Annual Report 2012
69
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
The accounting policies set out below have been applied consistently to the periods presented in these financial statements,
and in preparing the opening MFRS statements of financial position of the Group and of the Company at 1 January 2011 (the
transition date to MFRS framework), unless otherwise stated.
(a) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities, including unincorporated 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. Control exists when the Company has the ability to exercise its power to govern the financial and
operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that
presently are exercisable are taken into account.
Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment
losses. The cost of investments includes transaction costs.
(ii) 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.
As part of its transition to MFRS, the Group elected not to restate those business combinations that occurred before
the date of transition to MFRSs, i.e. 1 January 2011. Goodwill arising from acquisitions before 1 January 2011 has been
carried forward from the previous FRS framework as at the date of transition.
(iii) Acquisitions of non-controlling interests
The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity
transactions between the Group and its non-controlling interest holders. Any difference between the Group’s share of
net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves.