Cordlife Group Limited
Annual Report 2016
61
Notes to
The Financial Statements
for the financial year ended 30 June 2016
2.
Summary of significant accounting policies (cont’d)
2.4
Basis of consolidation and business combinations (cont’d)
(b)
Basis of consolidation (cont’d)
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an
equity transaction. If the Group loses control over a subsidiary, it
–
de-recognises the assets (including goodwill) and liabilities of the subsidiary at their carrying
amounts at the date when control is lost;
–
de-recognises the carrying amount of any non-controlling interest;
–
de-recognises the cumulative translation differences recorded in equity;
–
recognises the fair value of the consideration received;
–
recognises the fair value of any investment retained;
–
recognises any surplus or deficit in profit or loss;
–
re-classifies the Group’s share of components previously recognised in other comprehensive
income to profit or loss or retained earnings, as appropriate.
Basis of consolidation prior to 1 July 2010
Certain of the above-mentioned requirements were applied on a prospective basis. The following
differences, however, are carried forward in certain instances from the previous basis of consolidation:
–
Acquisition of non-controlling interests, prior to 1 July 2010, were accounted for using the parent
entity extension method, whereby, the difference between the consideration and the book value of
the share of the net assets acquired were recognised in goodwill.
–
Losses incurred by the Group were attributed to the non-controlling interest until the balance was
reduced to nil. Any further losses were attributed to the Group, unless the non-controlling interest
had a binding obligation to cover these. Losses prior to 1 July 2010 were not reallocated between
non-controlling interests and the owners of the Company.
(c)
Business combinations from 1 July 2010
Acquisitions of subsidiaries, other than those under common control, 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.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition date. This includes the separation of
embedded derivatives in host contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed
to be an asset or liability, will be recognised in accordance with FRS 39 either in profit or loss or as a
change to other comprehensive income. If the contingent consideration is classified as equity, it is not
remeasured until it is finally settled within equity.
