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BAKER TECHNOLOGY LIMITED ANNUAL REPORT 2012
BAKER TECHNOLOGY LIMITED ANNUAL REPORT 2012
2. Summaryof significant accounting policies (cont’d)
2.3 Basis of consolidation and business combination (cont’d)
(a) Basis of consolidation (cont’d)
Basis of consolidation from 1 January 2010 (cont’d)
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains
control, and continue to be consolidated until the date that such control ceases.
Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit
balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction. If theGroup loses control over a subsidiary, it:
– De-recognises the assets (including goodwill) and liabilities of the subsidiary at their carrying
amounts at the datewhen controls is lost;
– De-recognises the carrying amount of any non-controlling interest;
– De-recognises the cumulative translation differences recorded in equity;
– Recognises the fair value of the consideration received;
– Recognises the fair value of any investment retained;
– Recognises any surplus or deficit in profit or loss;
– Re-classifies theGroup’s share of components previously recognised in other comprehensive income
to profit or loss or retained earnings, as appropriate.
Basis of consolidation prior to 1 January 2010
Certain of the above-mentioned requirements were applied on a prospective basis. The following
differences, however, are carried forward in certain instances from the previous basis of consolidation:
– Acquisition of non-controlling interests, prior to 1 January 2010, were accounted for using the
parent entity extension method, whereby, the difference between the consideration and the book
value of the share of the net assets acquiredwere recognised in goodwill.
– Losses incurred by the Group were attributed to the non-controlling interest until the balance was
reduced tonil. Any further losseswereattributed to theGroup, unless thenon-controlling interest had
a binding obligation to cover these. Losses prior to 1 January 2010were not reallocated between
non-controlling interest and the owners of theCompany.
– Upon loss of control, theGroup accounted for the investment retained at its proportionate share of
net asset value at the date control was lost. The carrying value of such investments as at 1 January
2010 have not been restated.
for the financial year ended 31december 2012
for the financial year ended 31december 2012
2. Summaryof significant accounting policies (cont’d)
2.3 Basis of consolidation and business combination (cont’d)
(b) Business combinations
Business combinations from 1 January 2010
Business combinations are accounted for by applying the acquisitionmethod. Identifiable assets acquired
and liabilitiesassumed inabusinesscombinationaremeasured initiallyat their fair valuesat theacquisition
date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred
and the services are received.
When theGroupacquiresabusiness, it assesses thefinancial assetsand liabilitiesassumed forappropriate
classification and designation in accordance with the contractual terms, economic circumstances and
pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in
host contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent considerationwhich is deemed to
beanasset or liability,will be recognised inaccordancewith FRS39either inprofit or loss or as a change
to other comprehensive income. If the contingent consideration is classified as equity, it is not remeasured
until it is finally settledwithin equity.
Inbusinesscombinationsachieved in stages,previouslyheldequity interests in theacquireeare remeasured
to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.
TheGroupelects for each individual business combination,whether non-controlling interest in theacquiree
(if any) is recognisedon the acquisition date at fair value, or at the non-controlling interest’s proportionate
share of the acquiree’s identifiable net assets.
Any excess of the sum of the fair value of the consideration transferred in the business combination, 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. The accounting policy for goodwill is set out inNote 2.9. In instances
where the latter amount exceeds the former, theexcess is recognisedas gainonbargainpurchase inprofit
or loss on the acquisition date.
notestothe
financialstatements
notestothe
financialstatements
