FORGING AHEAD - Tradewinds Plantation Berhad

116
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2010
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.7 Investments (continued)
(b) Associates (continued)
When the Group’s share of losses in the associate equals or exceeds its interest in the associate, the carrying
amount of that interest is reduced to nil and the Group does not recognise further losses unless it has incurred legal
or constructive obligations or made payments on its behalf.
The most recent available financial statements of the associate are used by the Group in applying the equity
method. When the end of the reporting periods of the financial statements are not coterminous, the share of
results is arrived at using the latest financial statements for which the difference in end of the reporting periods is
no more than three (3) months. Adjustments are made for the effects of any significant transactions or events that
occur between the intervening periods.
Upon disposal of an investment in associate, the difference between the net disposal proceeds and its carrying
amount is included in profit or loss.
(c) Jointly controlled entities
A jointly controlled entity is a joint venture that involves the establishment of a corporation, partnership or other
entities over which there is contractually agreed sharing of joint control over the economic activity of the entity.
Joint control exists when the strategic financial and operational decisions relating to the activity require the
unanimous consent of all the parties sharing control.
In the Company’s separate financial statements, an investment in jointly controlled entities is stated at cost less
impairment losses, if any.
The investment in jointly controlled entity is accounted for in the consolidated financial statements using the equity
method of accounting. The Group’s share of the profit or loss of the jointly controlled entity during the financial
year is included in the consolidated financial statements, after adjustments to align the accounting policies with
those of the Group, from the date that joint control commences until the date that joint control ceases.
The Group recognises the portion of gains or losses on the sale of assets by the Group to the joint venture that
is attributable to the other venturers. The Group does not recognise its share of profits or losses from the joint
venture that result from the purchase of assets by the Group from the joint venture until it resells the assets to an
independent party. However, a loss on the transaction is recognised immediately if the loss provides evidence
of a reduction in the net realisable value of current assets or an impairment loss. When necessary, in applying
the equity method, adjustments are made to the financial statements of the jointly controlled entity to ensure
consistency of accounting policies with those of the Group.
Unrealised gains on transactions between the Group and its jointly controlled entity are eliminated to the extent
of the Group’s interest in the jointly controlled entity; unrealised losses are also eliminated unless the transaction
provides evidence on impairment of the asset transferred.
TRADEWINDS PLANTATION BERHAD
Annual Report 2010