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Cordlife Group Limited
Annual Report 2016
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)
(c)
Business combinations from 1 July 2010 (cont’d)
In business combinations achieved in stages, previously held equity interests in the acquiree are
remeasured 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), that are present ownership interests and entitle their holders to a proportionate share
of net assets in the event of liquidation, is recognised on the acquisition date at fair value, or at the non-
controlling interest’s proportionate share of the acquiree’s identifiable net assets. Other components of
non-controlling interests are measured at their acquisition date fair value, unless another measurement
basis is required by another FRS.
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 instances where the latter amount exceeds the former, the
excess is recognised as gain on bargain purchase in profit or loss on the acquisition date.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For that
purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date,
allocated to each of the Group’s cash-generating units that are expected to benefit from the combination,
irrespective of whether other assets or liabilities of the acquire are assigned to those units.
The cash generating units to which goodwill have been allocated is tested for impairment annually and
whenever there is an indication that the cash-generating unit may be impaired. Impairment is determined
for goodwill by assessing the recoverable amount of each cash-generating unit (or group of cash-
generating units) to which the goodwill relates.
(d)
Business combinations prior to 1 July 2010
In comparison to the above mentioned requirements, the following differences applied:
Business combinations are accounted for by applying the purchase method. Transaction costs directly
attributable to the acquisition formed part of the acquisition costs. The non-controlling interest (formerly
known as minority interest) was measured at the proportionate share of the acquiree’s identifiable net
assets.
Business combinations achieved in stages were accounted for as separate steps. Adjustments to those
fair values relating to previously held interests are treated as a revaluation and recognised in equity. Any
additional acquired share of interest did not affect previously recognised goodwill.
When the Group acquired a business, embedded derivatives separated from the host contract by the
acquiree are not 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.
Contingent consideration was recognised if, and only if, the Group had a present obligation, the
economic outflow was more likely than not and a reliable estimate was determinable. Subsequent
adjustments to the contingent consideration were recognised as part of goodwill.
