TAN CHONG MOTOR HOLDINGS BERHAD
Annual Report 2014
55
NOTES TO THE FINANCIAL STATEMENTS
2.
Significant accounting policies
The accounting policies set out below have been applied consistently to the periods presented in these financial
statements and have been applied consistently by Group entities, unless otherwise stated.
(a) Basis of consolidation
(i)
Subsidiaries
Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements
of subsidiaries are included in the consolidated financial statements from the date that control commences
until the date that control ceases.
The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with
the entity and has the ability to affect those returns through its power over the entity. Potential voting rights
are considered when assessing control only when such rights are substantive. The Group also considers it
has de facto power over an investee when, despite not having the majority of voting rights, it has the current
ability to direct the activities of the investee that significantly affect the investee’s return.
Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any
impairment losses, unless the investment is classified as held for sale or distribution. The cost of investment
includes transaction costs.
(ii) Business combinations
Business combinations are accounted for using the acquisition method from the acquisition date, which is
the date on which control is transferred to the Group.
For new acquisitions, the Group measures the cost of goodwill at the acquisition date as:
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t UIF SFDPHOJTFE BNPVOU PG BOZ OPO DPOUSPMMJOH JOUFSFTUT JO UIF BDRVJSFF QMVT
t JG UIF CVTJOFTT DPNCJOBUJPO JT BDIJFWFE JO TUBHFT UIF GBJS WBMVF PG UIF FYJTUJOH FRVJUZ JOUFSFTU JO UIF
acquiree; less
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assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
For each business combination, the Group elects whether it measures the non-controlling interests in the
acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets at the
acquisition date.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group
incurs in connection with a business combination are expensed as incurred.
(iii) Acquisitions of non-controlling interests
The Group accounts for all changes in its ownership interest in a subsidiary that do not result in a loss of
control as equity transactions between the Group and its non-controlling interest holders. Any difference
between the Group’s share of net assets before and after the change, and any consideration received or
paid, is adjusted to or against the Group reserves.
