Annual Report (Complete) - MYCRON Steel Berhad

Notes to the Financial Statements
30 June 2010
(continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(a)
Basis of preparation (continued)
(iv)
Standards, amendments to published standards, interpretations to existing standards that are not applicable and
are not effective to the Group (continued)
• The amendment to FRS 2 “Share-based Payment: Vesting Condition and Cancellations”
• The amendment to FRS 5 “Non-current Assets Held for Sale and Discontinued Operations”
• The amendment to FRS 117 “Leases”
• The amendment to FRS 120 “Accounting for Government Grants”
• The amendment to FRS 129 “Financial Reporting in Hyperinflationary Economies”
• The amendment to FRS 140 “Investment Property”
• IC Interpretation 13 “Customer Loyalty Programme”
• IC Interpretation 14 “FRS 119 The Limit on a Defined Benefit Assets, Minimum Funding Requirements and Their
Interaction”
The amendments to published standards and interpretations to existing standards that are effective for periods
beginning on or after 1 July 2010 are as follows:
• The amendment to FRS 5 “Non-current Assets Held for Sale and Discontinued Operations”
• The revised FRS 3 “Business Combinations”
• IC Interpretation 12 “Service Concession Arrangements”
• IC Interpretation 15 “Agreements for Construction of Real Estates”
• IC Interpretation 16 “Hedges of a Net Investment in a Foreign Operation”
• IC Interpretation 17 “Distribution of Non-cashAssets to Owners”
(b)
Basis of consolidation
(i)
Subsidiaries
Subsidiaries are those corporations, partnerships or other entities (including special purpose entities) in which the
Group has 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. The existence and
effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether
the Group controls another entity.
Subsidiaries are consolidated using the purchase method of accounting.
Under the purchase method of accounting, subsidiaries are fully consolidated from the date on which control is
transferred to the Group and are de-consolidated from the date that control ceases. The cost of an acquisition is
measured as fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of
exchange, plus costs directly attributable to the acquisition.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date, irrespective of the extent of any minority interests. The excess of
the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired at the date of
acquisition is reflected as goodwill. See the accounting policy Note 2 (c) on goodwill. If the cost acquisition is less
than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income
statement.
Where more than one exchange transaction is involved, any adjustment to the fair values of the subsidiary’s
identifiable assets, liabilities and contingent liabilities relating to previously held interests of the Group is accounted
for as a revaluation.
Intra-group transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated but considered an impairment indicator of the asset transferred. Accounting
policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the
Group.
The gain or loss on disposal of a subsidiary is the difference between net disposal proceeds and the Group’s share of
its net assets as of the date of disposal, including the cumulative amount of any exchange differences that relate to
the subsidiary, and is recognised in the consolidated income statement.
pg 55 | Mycron Steel Berhad