FINANCIAL STATEMENTS - Mewah Group

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MEWAH INTERNATIONAL INC.NOTES TOTHE FINANCIAL STATEMENTSFor the financial year ended 31 December 20122. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)2.2 Revenue recognition (continued)The Group recognises revenue when the amount of revenue and related cost can be reliably measured, it is probable that thecollectability of the related receivables is reasonably assured and when the specific criteria for each of the Group’s activities aremet as follows:(a) Sale of goodsRevenue from sale of goods is recognised when significant risks and rewards of ownership are transferred to the buyer andthere is neither continuing managerial involvement to the degree usually associated with ownership nor effective control overthe goods sold.(b) Interest incomeInterest income is recognised using the effective interest method.(c) Rental incomeRental income from operating leases (net of any incentives given to the lessees) is recognised on a straight-line basis over thelease term.2.3 Group accounting(a) Subsidiaries(i)ConsolidationSubsidiaries are entities (including special purpose entities) over which the Group has power to govern the financial andoperating policies so as to obtain benefits from its activities, generally accompanied by a shareholding giving rise to amajority of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertibleare considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date onwhich control is transferred to the Group. They are de-consolidated from the date on which control ceases.In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions betweengroup entities are eliminated. Unrealised losses are also eliminated but are considered an impairment indicator of theasset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with thepolicies adopted by the Group.Non-controlling interests are that part of the net results of operations and of net assets of a subsidiary attributable tothe interests which are not owned directly or indirectly by the equity holders of the Company. They are shown separatelyin the consolidated income statement, consolidated statement of comprehensive income, consolidated statement ofchanges in equity and consolidated statement of financial position. Total comprehensive income is attributed to the noncontrollinginterests based on their respective interests in a subsidiary, even if this results in the non-controlling interestshaving a deficit balance.50
ANNUAL REPORT 2012NOTES TOTHE FINANCIAL STATEMENTSFor the financial year ended 31 December 20122. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)2.3 Group accounting (continued)(a) Subsidiaries (continued)(ii) AcquisitionsThe acquisition method of accounting is used to account for business combinations by the Group, except for businesscombination under common control.For business combinations under acquisition method of accounting, the consideration transferred for the acquisitionof a subsidiary or business comprises the fair value of the assets transferred, the liabilities incurred and the equityinterests issued by the Group. The consideration transferred also includes the fair value of any contingent considerationarrangement and the fair value of any pre-existing equity interest in the subsidiary.Acquisition-related costs are expensed as incurred.Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limitedexceptions, measured initially at their fair values at the acquisition date.On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date ofacquisition either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable netassets.The excess of (i) the consideration transferred, the amount of any non-controlling interest in the acquiree and theacquisition-date fair value of any previous equity interest in the acquiree over the (ii) fair value of the identifiable netassets 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 thismethod:has been in existence since the earliest date the entities are under common control; perspective of the controlling party;common control; statement of financial position, statement of cash flows and statement of changes in equity have been prepared asif the combination had occurred from the date when the combining entities or businesses first came under commoncontrol;51
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FINANCIAL STATEMENTS - Mewah Group

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