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Gamuda Berhad (29579-T) • Annual Report 2012
2.
Summary of significant accounting policies (cont’d.)
2.4 Basis of consolidation (cont’d.)
Acquisitions of subsidiaries are accounted for by applying the acquisition method. Identifiable assets acquired
and liabilities assumed in a business combination are measured initially at their fair values at the acquisition
date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and
the services are received.
In business combinations achieved in stages, previously held equity interests in the acquiree are re-measured
to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.
The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if
any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share
of the acquiree net identifiable assets.
Any excess of the sum of the fair value of the consideration transferred in the business combination, the
amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held
equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities
is recorded as goodwill in the statement of financial position. The accounting policy for goodwill is set out in
Note 2.9(a). In instances where the latter amount exceeds the former, the excess is recognised as a gain on
bargain purchase in profit or loss on the acquisition date.
When the Group acquires a business, embedded derivatives separated from the host contract by the acquiree
are reassessed on acquisition unless the business combination results in a change in the terms of the contract
that significantly modifies the cash flows that would otherwise be required under the contract.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control,
and continue to be consolidated until the date that such control ceases.
2.5 Transactions with non-controlling interest
Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners
of the Company, and is presented separately in the consolidated income statement, consolidated statement of
comprehensive income and within equity in the consolidated statement of financial position, separately from
equity attributable to owners of the Company.
Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are
accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and
non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any
difference between the amount by which the non-controlling interest is adjusted and the fair value of the
consideration paid or received is recognised directly in equity and attributed to owners of the parent.
NoTES To ThE FINANCIAL STATEMENTS
31 July 2012