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| MARCO POLO MARINE LTD
ANNUAL REPORT 2014
46
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)
2.3 Business combinations (Continued)
Business combinations from 1 October 2010 (Continued)
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under
FRS 103 Business Combinations are recognised at their fair value at the acquisition date, except that:
 deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are
recognised and measured in accordance with FRS 12 Income Taxes and FRS 19 Employee Benefits
respectively;
 liabilities or equity instruments related to the replacement by the Group of an acquiree’s share-based
payment awards are measured in accordance with FRS 102 Share-based Payment; and
 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 are measured in accordance with that standard.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted during the measurement period (see below), or additional assets or liabilities
are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition
date that, if known, would have affected the amounts recognised as of that date.
The measurement period is the period from the date of acquisition to the date the Group obtains complete
information about facts and circumstances that existed as of the acquisition date, and is subject to a maximum of
one year.
Goodwill arising on acquisition is recognised as an asset at the acquisition date and is initially measured at cost,
being the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the
acquiree and the fair value of the acquirer previously held equity interest (if any) in the entity over net acquisition-date
fair value amounts of the identifiable assets acquired and the liabilities assumed.
If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable net assets exceeds the
sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of
the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognised immediately in profit or
loss as a bargain purchase gain.
Business combinations before 1 October 2010
In comparison to the above mentioned requirements, the following differences applied:
Business combinations were 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 step acquisitions. Adjustments to those fair values
relating to previously held interests were treated as a revaluation and recognised in equity.
When the Group acquired a business, embedded derivatives separated from the host contract by the acquiree were
not reassessed on acquisition unless the business combination resulted in a change in the terms of the contract that
significantly modified 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 probable and a reliable estimate was determinable. Subsequent measurements to the contingent consideration
affected goodwill.