Financial Statements - Mewah Group

Building Capabilities
Notes to the Financial Statements
For the financial year ended 31 December 2011
2. Significant accounting policies (continued)
2.3 Group accounting (continued)
(a)
Subsidiaries (continued)
(ii)
Acquisitions (continued)
On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree
at the date of acquisition either at fair value or at the non-controlling interest’s proportionate share of the
acquiree’s net identifiable assets.
The excess of (i) the consideration transferred, the amount of any non-controlling interest in the acquiree and
the acquisition-date fair value of any previous equity interest in the acquiree over the (ii) fair value of the net
identifiable assets acquired is recorded as goodwill. Please refer to Note 2.5 for the subsequent accounting
policy on goodwill.
Acquisitions of entities under common control have been accounted for using the pooling-of-interest
method. Under this method:
The financial statements of the Group have been prepared as if the Group structure immediately after
the transaction has been in existence since the earliest date the entities are under common control;
The assets and liabilities are brought into the financial statements at their existing carrying amounts
from the perspective of the controlling party;
The income statement includes the results of the acquired entities since the earliest date the entities are
under common control;
The comparative figures of the Group represent the income statement, statement of comprehensive
income, statement of financial position, statement of cash flows and statement of changes in equity
have been prepared as if the combination had occurred from the date when the combining entities or
businesses first came under common control;
The cost of investment is recorded at the aggregate of the nominal value of the equity shares issued,
cash and cash equivalents and fair values of other consideration; and
On consolidation, the difference between the cost of investment and the nominal value of the share
capital of the merged subsidiary is taken to merger reserve. Cash paid/payable arising from the
acquisition under common control is also taken to the merger reserves.
59