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Gamuda Berhad (29579-T) • Annual Report 2012
2.
Summary of significant accounting policies (cont’d.)
2.8 Joint venture
The Group has interests in joint ventures which are jointly controlled entities. A joint venture is a contractual
arrangement whereby two or more parties undertake an economic activity that is subject to joint control, where
the strategic financial and operating decisions relating to the activity require the unanimous consent of the
parties sharing control. The Group recognises its interest in joint venture using proportionate consolidation.
The Group combines its share of each of the assets, liabilities, income and expenses of the joint venture with
the similar items, line by line, in its consolidated financial statements. The joint venture is proportionately
consolidated from the date the Group obtains joint control until the date the Group ceases to have joint control
over the joint venture.
Adjustments are made in the Group’s consolidated financial statements to eliminate the Group’s share of
intragroup balances, income and expenses and unrealised gains and losses on transactions between the
Group and its jointly controlled entity.
The financial statements of the joint venture are prepared as of the same reporting date as the Company. When
the reporting dates of the Company and a joint venture are different, the joint venture prepares additional
financial statements as of the same date as that of the Company for consolidation purposes. Where necessary,
adjustments are made to bring the accounting policies into line with those of the Group.
In the Company’s separate financial statements, its interests in jointly controlled entities are stated at cost less
impairment losses.
on disposal of such interests, the difference between net disposal proceeds and their carrying amounts is
included in profit or loss.
2.9 Intangible assets
a)
Goodwill
Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less
accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of
the Group’s cash-generating units that are expected to benefit from the synergies of the combination.
The cash-generating unit to which goodwill has been allocated is tested for impairment annually and
whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying
amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of
the cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the
carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised
for goodwill are not reversed in subsequent periods.
NoTES To ThE FINANCIAL STATEMENTS
31 July 2012