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MARCO POLO MARINE LTD |
ANNUAL REPORT 2014
45
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 September 2014
(Amounts in thousands of Singapore dollars unless otherwise stated)
2. Significant accounting policies (Continued)
2.2 Basis of consolidation
The financial statements of the Group comprise the financial statements of the Company and its subsidiaries.
Subsidiaries are entities (including special purposes entities) over which the Group has the power to govern the
financial and operating policies, generally accompanied by a shareholding of more than one half of the voting rights.
Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on
which control ceases, as appropriate.
Intra-group balances, transactions, income and expenses are eliminated on consolidation.
The financial statements of the subsidiaries used in the preparation of the financial statements are prepared for
the same reporting date as that of the Company. Where necessary, accounting policies of subsidiaries have been
changed to ensure consistency with the policies adopted by the Group.
Non-controlling interests are identified separately from the Group’s equity therein. On an acquisition-by-acquisition
basis, non-controlling interests may be initially measured either at fair value or at their proportionate share of the
fair value of the acquiree’s identifiable net assets. Subsequent to acquisition, the carrying amount of non-controlling
interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent
changes in equity. Losses in the subsidiary are attributed to non-controlling interests even if this results in the non-
controlling interests having a deficit balance.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity
transactions. Any differences between the amount by which the non-controlling interests are adjusted to reflect
the changes in the relative interests in the subsidiary and the fair value of the consideration paid or received is
recognised directly in equity and attributed to the owners of the Company.
When the Group loses control over a subsidiary, the profit or loss on disposal is calculated as the difference
between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest
and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-
controlling interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary
are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner
as would be required if the relevant assets or liabilities were disposed of. The fair value of any investments retained
in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for
subsequent accounting under FRS 39 Financial Instruments: Recognition and Measurement or, when applicable, the
cost on initial recognition of an investment in an associate or jointly controlled entity.
Investments in subsidiaries, joint controlled entities and associates are carried at cost less any impairment loss that
has been recognised in profit or loss.
2.3 Business combinations
Business combinations from 1 October 2010
The acquisition of subsidiaries is accounted for using the acquisition method. The cost of the acquisition is
measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or
assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related
costs are recognised in profit or loss as incurred.
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under
FRS 103 are recognised at their fair values at the acquisition date, except for non-current assets (or disposal
groups) that are classified as held-for-sale in accordance with FRS 105 Non-Current Assets Held for Sale and
Discontinued Operations, which are recognised and measured at the lower of cost and fair value less costs to sell.
Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity
are remeasured to fair value at the acquisition date (i.e. the date the Group attains control) and the resulting gain or
loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date
that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such
treatment would be appropriate if that interest were disposed of.