TAN CHONG MOTOR HOLDINGS BERHAD
Annual Report 2014
56
NOTES TO THE FINANCIAL STATEMENTS
2.
Significant accounting policies (continued)
(a) Basis of consolidation (continued)
(iv) Loss of control
Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former
subsidiary, any non-controlling interests and the other components of equity related to the former subsidiary
from the consolidated statement of financial position. Any surplus or deficit arising on the loss of control
is recognised in profit or loss. If the Group retains any interest in the former subsidiary, then such interest
is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-
accounted investee or as an available-for-sale financial asset depending on the level of influence retained.
(v) Associates
Associates are entities, including unincorporated entities, in which the Group has significant influence, but
not control, over the financial and operating policies.
Investments in associates are accounted for in the consolidated financial statements using the equity method
less any impairment losses, unless it is classified as held for sale or distribution. The cost of the investment
includes transaction costs. The consolidated financial statements include the Group’s share of the profit or
loss and other comprehensive income of the associates, after adjustments if any, to align the accounting
policies with those of the Group, from the date that significant influence commences until the date that
significant influence ceases.
When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest
including any long-term investments is reduced to zero, and the recognition of further losses is discontinued
except to the extent that the Group has an obligation or has made payments on behalf of the associate.
When the Group ceases to have significant influence over an associate, any retained interest in the former
associate at the date when significant influence is lost is measured at fair value and this amount is regarded
as the initial carrying amount of a financial asset. The difference between the fair value of any retained
interest plus proceeds from the interest disposed of and the carrying amount of the investment at the date
when equity method is discontinued is recognised in the profit or loss.
When the Group’s interest in an associate decreases but does not result in a loss of significant influence, any
retained interest is not remeasured. Any gain or loss arising from the decrease in interest is recognised in
profit or loss. Any gains or losses previously recognised in other comprehensive income are also reclassified
proportionately to the profit or loss if that gain or loss would be required to be reclassified to profit or loss on
the disposal of the related assets or liabilities.
Investments in associates 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.
(vi) Joint arrangements
Joint arrangements are arrangements of which the Group has joint control, established by contracts requiring
unanimous consent for decisions about the activities that significantly affect the arrangements’ returns.
Joint arrangements are classified and accounted for as follows:
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the assets and obligations for the liabilities relating to an arrangement. The Group and the Company
account for each of its share of assets, liabilities and transactions, including its share of those held or
incurred jointly with the other investors, in relation to the joint operation.
