Annual Report - QuamIR

Notes to the Consolidated Financial Statements (Continued)
2 Summary of significant accounting policies (Continued)
2.2 Consolidation (Continued)
(a) Subsidiaries (Continued)
In the Company’s balance sheet, investments in
subsidiaries are accounted for at cost less impairment.
Cost is adjusted to reflect changes in consideration arising
from contingent consideration amendments. The results
of subsidiaries are accounted for by the company on the
basis of dividend received and receivable.
2
2.2
(a)
Impairment testing of the investments in subsidiaries is
required upon receiving dividends from these investments
if the dividend exceeds the total comprehensive income
of the subsidiary in the period the dividend is declared or
if the carrying amount of the investment in the separate
financial statements exceeds the carrying amount in the
consolidated financial statements of the investee’s net
assets including goodwill.
Inter-company transactions, balances and unrealised gains
on transactions between group companies are eliminated.
Unrealised losses are also eliminated. Accounting policies
of subsidiaries have been changed where necessary
to ensure consistency with the policies adopted by the
Group.
When the Group ceases to have control, any retained
interest in the entity re-measured to its fair value at the
date when control is lost, with the change in carrying
amount recognised in profit or loss. The fair value is the
initial carrying amount for the purposes of subsequently
accounting for the retained interest as an associated
company, jointly controlled entity or financial asset. In
addition, any amounts previously recognised in other
comprehensive income in respect of that entity are
accounted for as if the Group had directly disposed of the
related assets or liabilities. This may mean that amounts
previously recognised in other comprehensive income are
reclassified to profit or loss.
84 HKC (Holdings) Limited • Annual Report 2011