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SEE HUP SENG LIMITED
Annual Report 2012
45
Notes to the Financial Statements
31 DECEMBER 2012
2 Significant Accounting Policies (Continued)
(c) Group Accounting (Continued)
(i) Subsidiaries (Continued)
Consolidation (Continued)
Acquisition of business:
The acquisition method of accounting is used to account for business combinations by the
Group. The consideration transferred for the acquisition of a subsidiary comprises the fair value
of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The
consideration transferred also includes the fair value of any contingent consideration arrangement
and the fair value of any pre-existing equity interest in the subsidiary.
The Group elects for each individual business combination, whether non-controlling interest in
the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling
interest’s proportionate share of the acquiree net identifiable assets.
Any excess of the sum of the fair value of the consideration transferred in the business
combinations 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 on the statement of financial
position.
The accounting policy for goodwill is set out in Note 2(e)(i) Goodwill. In instances where the latter
amount exceeds the former, the excess is recognised as a gain on bargain purchase in profit or
loss on the acquisition date.
Acquisition-related costs are expensed as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are, with limited exceptions, measured initially at their fair values at the acquisition
date.
(ii) Transactions with non-controlling interest
Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly,
to owners of the Company, and are presented separately in the consolidated statement of
comprehensive income and within equity in the consolidated balance sheets, separately from
equity attributable to owners of the Company.
Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss
of control are accounted for as equity transactions. In such circumstances, the carrying amounts
of the controlling and non-controlling interests are adjusted to reflect the changes in their relative
interests in the subsidiary. Any difference between the amount by which the non-controlling interest
is adjusted and the fair value of the consideration paid or received is recognised directly in equity
and attributed to owners of the parent.