. 87
ANNUAL
REPORT
20 1 7
THE BE ST
I N US
NOTESTOTHE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017
2.
SUMMARYOF SIGNIFICANTACCOUNTINGPOLICIES (CONT’D)
2.3
Basisof consolidationandbusinesscombinations (cont’d)
(b)
Businesscombinationsandgoodwill
Business combinations are accounted for by applying the acquisition method. Identifiable assets
acquiredand liabilities assumed inabusinesscombinationaremeasured initiallyat their fair values at
theacquisitiondate. Acquisition-relatedcostsare recognisedasexpenses in theperiods inwhich the
costs are incurred and the services are received.
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 tobe an asset or liability, will be recognised inprofit or loss.
TheGroup elects for each individual business combination, whether non-controlling interest in the
acquiree (if any), that are present ownership interests and entitle their holders to a proportionate
shareof net assets in the events of liquidation, is recognisedon the acquisitiondate at fair value, or
at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. Other
components of non-controlling interests are measured at their acquisition date fair value, unless
anothermeasurement basis is requiredby another FRS.
Anyexcessof the sumof the fair valueof theconsideration transferred in thebusinesscombination,
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. In instances where the latter amount
exceeds the former, the excess is recognised as gain on bargain purchase in profit or loss on the
acquisitiondate.
Goodwill is initiallymeasured at cost. Following initial recognition, goodwill ismeasured at cost less
any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to the Group’s cash-generating units that are expected to benefit from
the synergies of the combination, irrespective of whether other assets or liabilities of the acquiree
are assigned to thoseunits.
The cash-generating units towhich goodwill have been allocated is tested for impairment annually
and whenever there is an indication that the cash-generating unit may be impaired. Impairment
is determined for goodwill by assessing the recoverable amount of each cash-generating unit (or
groupof cash-generatingunits) towhich thegoodwill relates.
