Notestothefinancialstatements
For the financial year ended31December 2015
2.
Summaryof significant accountingpolicies (cont’d)
2.3
Basisof consolidationandbusinesscombination (cont’d)
(b)
Businesscombinationsandgoodwill
Businesscombinationsareaccounted forbyapplying theacquisitionmethod. Identifiableassetsacquiredand liabilitiesassumed inabusinesscombination
aremeasured initially at their fair values at the acquisition date. Acquisition-related costs are recognised as expenses in the periods inwhich the costs
are incurredand the servicesare received.
Anycontingent consideration tobe transferredby theacquirerwill be recognisedat fairvalueat theacquisitiondate. Subsequent changes to the fairvalue
of the contingent considerationwhich isdeemed tobeanasset or liability, will be recognised inprofit or loss.
TheGroupelects for each individual business combination, whether non-controlling interest in theacquiree (if any), that arepresent ownership interests
andentitle theirholders toaproportionateshareof net assets in theeventsof liquidation, is recognisedon theacquisitiondateat fair value, orat thenon-
controlling interest’s proportionate share of the acquiree’s identifiable net assets. Other components of non-controlling interests aremeasured at their
acquisitiondate fair value, unlessanothermeasurement basis is requiredby anotherFRS.
Anyexcessof thesumof the fairvalueof theconsideration transferred in thebusinesscombination, theamountofnon-controlling interest in theacquiree
(if any), and the fair valueof theGroup’spreviously heldequity interest in theacquiree (if any), over thenet fair valueof theacquiree’s identifiableassets
and liabilities is recordedas goodwill. In instanceswhere the latter amount exceeds the former, theexcess is recognisedas gainonbargainpurchase in
profit or losson theacquisitiondate.
Goodwill is initiallymeasuredat cost. Following initial recognition, goodwill ismeasuredat cost lessany accumulated impairment losses.
For thepurposeof impairment testing, goodwill acquired inabusinesscombination is, from theacquisitiondate, allocated to theGroup’scash-generating
units that areexpected tobenefit from thesynergiesof the combination, irrespectiveofwhether other assetsor liabilitiesof theacquireeareassigned to
thoseunits.
The cash-generating units to which goodwill have been allocated is tested for impairment annually andwhenever there is an indication that the cash-
generatingunitmay be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each cash-generatingunit (or group of
cash-generatingunits) towhich thegoodwill relates.
2.
Summaryof significant accountingpolicies (cont’d)
2.4
Foreigncurrency
The financial statements are presented in Singapore Dollars, which is also the Company’s functional currency. Each entity in the Group determines its own
functional currency and items included in the financial statementsof eachentity aremeasuredusing that functional currency.
(a)
Transactionsandbalances
Transactions in foreign currencies aremeasured in the respective functional currencies of theCompany and its subsidiaries and are recorded on initial
recognition in the functionalcurrenciesatexchangeratesapproximating thoserulingat the transactiondates.Monetaryassetsand liabilitiesdenominated
in foreign currencies are translatedat the rateof exchange rulingat theendof the reportingperiod. Non-monetary items that aremeasured in terms of
historical cost in a foreign currency are translatedusing theexchange rates as at thedates of the initial transactions. Non-monetary itemsmeasured at
fair value ina foreign currency are translatedusing theexchange ratesat thedatewhen the fair valuewasmeasured.
Exchange differences arising on the settlement ofmonetary items or on translatingmonetary items at the end of the reporting period are recognised in
profit or loss.
(b)
Consolidated financial statements
Forconsolidationpurposes, theassetsand liabilitiesof foreignoperationsare translated intoSGDat therateofexchangerulingat theendof thereporting
period and their profit or loss are translated at the exchange rates prevailing at the date of the transactions. The exchange differences arising on the
translationare recognised inother comprehensive income. Ondisposal of a foreignoperation, the component of other comprehensive income relating to
that particular foreignoperation is recognised inprofit or loss.
2.5
Subsidiaries
Asubsidiary isan investee that iscontrolledby theGroup.TheGroupcontrolsan investeewhen it isexposed,orhasrights, tovariablereturns from its involvement
with the investeeandhas theability toaffect those returns through itspower over the investee.
In theCompany’s separate financial statements, investments in subsidiariesareaccounted for at cost lessany impairment losses.
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BAKERTECHNOLOGYlimited
ANNUAL REPORT 2015
