71 / 140
Asia Media Group Berhad
►
Annual Report 2015
Notes to the Financial Statements
(continued)
pg.
70
3.
Summary of significant accounting policies
(a) Business combination
Business combinations are accounted for using the acquisition method. The cost of an
acquisition is measured as the aggregate of the consideration transferred measured at
acquisition date fair value and the amount of any non-controlling interests in the acquiree.
For each business combination, the Group elects whether to measure the non-controlling
interest in the acquiree at fair value or at the proportionate share of the acquiree’s
identifiable net assets. Acquisition-related costs are expensed as incurred and included in
administrative expenses. When the Group acquires a business, it assesses the financial
assets and financial liabilities assumed for appropriate classification and designation in
accordance with the contractual terms, economic circumstances and pertinent conditions
as at the acquisition date.
If the business combination is achieved in stages, the previously held equity interest is
remeasured at its acquisition date fair value and any resulting gain or loss is recognised
in profit or loss. It is then considered in the determination of goodwill. Any contingent
consideration to be transferred by the acquirer will be recognised at fair value at the
acquisition date. Contingent consideration classified as an asset or liability that is a financial
instrument and within the scope of MFRS 139 ‘Financial Instruments: Recognition and
Measurement’ (“MFRS 139”) is measured at fair value with changes in fair value recognised
either in profit or loss or as a change to other comprehensive income. If the contingent
consideration is not within the scope of MFRS 139, it is measured in accordance with the
appropriate MFRSs. Contingent consideration that is classified as equity is not remeasured
and subsequent settlement is accounted for within equity.
(b) Investment in subsidiaries
A subsidiary is an entity controlled by the Company. Control exists when the Company
has the power over the entity, is exposed to or has rights to variable returns from its
involvement with the entity and has the ability to use its power over the entity to affect the
amount of the company’s return. In assessing control, potential voting rights that presently
are exercisable are taken into account.
In the Company’s separate financial statements, investment in a subsidiary is accounted for
at cost less accumulated impairment losses. The policy for the recognition and measurement
of impairment losses is in accordance with Note 3(f). On disposal of such investment, the
difference between the net disposals proceed and its carrying amount is recognised as
gain or loss on disposal in profit or loss.