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BAKER TECHNOLOGY LIMITED ANNUAL REPORT 2012
BAKER TECHNOLOGY LIMITED ANNUAL REPORT 2012
2. Summaryof significant accounting policies (cont’d)
2.5 Subsidiaries
A subsidiary is an entity over which theGroup has the power to govern the financial and operating policies so
as to obtain benefits from its activities.
In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less any
impairment losses.
2.6 Associates
An associate is an entity, not beinga subsidiary or a joint venture, inwhich theGroup has significant influence.
The associate is equity accounted for from the date the Group obtains significant influence until the date the
Group ceases to have significant influence over the associate.
TheGroup’s investments in associates are accounted for using the equitymethod. Under the equitymethod, the
investment in associate is carried in the balance sheet at cost plus post-acquisition changes in theGroup’s share
of net assets of theassociate.Goodwill relating toassociates is included in the carryingamount of the investment
and is neither amortised nor tested individually for impairment. Any excess of theGroup’s share of the net fair
value of the associate’s identifiable asset, liabilities and contingent liabilities over the cost of the investment is
included as income in the determination of the Group’s share of profit or loss of the associate in the period in
which the investment is acquired.
Theprofit or loss reflects the share of the results of operations of theassociates.Where there has beena change
recognised in other comprehensive income by the associates, theGroup recognises its share of such changes in
other comprehensive income. Unrealised gains and losses resulting from transactions between the Group and
the associate are eliminated to the extent of the interest in the associates.
TheGroup’s share of theprofit or loss of its associates is theprofit attributable to equity holders of theassociates
and therefore is the profit after tax and non-controlling interests in the subsidiaries of associates.
When theGroup’s share of losses inanassociate equals or exceeds its interest in theassociate, theGroupdoes
not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.
After application of the equitymethod, theGroupdetermineswhether it is necessary to recognise an additional
impairment loss on theGroup’s investment in its associates. TheGroup determines at each balance sheet date
whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the
Group calculates the amount of impairment as the difference between the recoverable amount of the associate
and its carrying value and recognises the amount in the profit or loss.
for the financial year ended 31december 2012
for the financial year ended 31december 2012
2. Summaryof significant accounting policies (cont’d)
2.6 Associates (cont’d)
The financial statements of the associate are prepared as of the same reporting date as the Company unless it
is impracticable to do so. When the financial statements of an associate used in applying the equity method
are prepared as of a different reporting date from that of theCompany, adjustments aremade for the effects of
significant transactions or events that occur between the sale and the reporting date of the Company. Where
necessary, adjustments aremade to bring the accounting policies in linewith those of theGroup.
Upon lossof significant influenceover theassociate, theGroupmeasuresand recognisesany retained investment
at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence
and the fair valueof theaggregateof the retained investment andproceeds fromdisposal is recognised inprofit
or loss.
2.7 Joint venture
A joint venture is a contractual arrangement whereby twoormoreparties undertakean economic activity that is
subject to joint control, where the strategic financial and operating decisions relating to the activity require the
unanimous consent of the parties sharing control.
TheGroup’s investment in joint venture is accounted for using the equity method. Under the equity method, the
investment in joint venture is carried in the balance sheet at cost plus post-acquisition changes in the Group’s
share of net assets of the joint venture. Goodwill relating to joint venture is included in the carrying amount of
the investment and is neither amortised nor tested individually for impairment. Any excess of theGroup’s share
of the net fair value of the joint venture’s identifiable asset, liabilities and contingent liabilities over the cost of
the investment is deducted from the carrying amount of the investment and is recognised as income as part of
theGroup’s share of profit or loss of the joint venture in the period inwhich the investment is acquired.
The profit or loss reflects the share of the results of operations of the joint venture. Where there has been a
change recognised in other comprehensive income by the joint venture, theGroup recognises its share of such
changes in other comprehensive income. Unrealised gains and losses resulting from transactions between the
Group and the joint venture are eliminated to the extent of the interest in the joint venture.
TheGroup’s share of the profit or loss of its joint venture is shown on the face of profit or loss after tax.
When theGroup’s shareof losses in the joint ventureequals or exceeds its interest in the joint venture, theGroup
does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint
venture.
After application of the equitymethod, theGroupdetermineswhether it is necessary to recognise an additional
impairment loss on theGroup’s investment in its joint venture. TheGroupdetermines at eachbalance sheet date
whether there is any objective evidence that the investment in the joint venture is impaired. If this is the case,
the Group calculates the amount of impairment as the difference between the recoverable amount of the joint
venture and its carrying value and recognises the amount in the profit or loss.
notestothe
financialstatements
notestothe
financialstatements
