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Annual Report 2016
ASIA MEDIA GROUP Berhad
71
Notes to the Financial Statements
(continued)
3.
Summary of significant accounting policies
3.1 Basis of consolidation
(a) Investment in subsidiaries
Subsidiaries are entities, including unincorporated entities, controlled by the Company.
The financial statements of subsidiaries are included in the consolidated financial
statements from the date that control commences until the date that control ceases.
Control is achieved when the Group is exposed to, or has rights, to variable returns
from its involvement with the investee and has the ability to affect those returns
through its power over the investee. In assessing control, potential voting rights that
presently are exercisable are taken into account.
The Group also considers it has de facto power over an investee when, despite not
having the majority of voting rights, it has the current ability to direct the activities of
the investee that significantly affects the investee’s return. When the Group has less
than a majority of the voting or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it has power over an investee,
including:
•
The contractual arrangement with the other vote holders of the investee;
•
Rights arising from other contractual arrangements; and
•
The Group’s voting rights and potential voting rights.
The Group reassesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control.
Investments in subsidiaries are measured in the Company’s statement of financial
position at cost less any impairment losses, unless the investment is held for sale
(accounted for in accordance with MFRS 5, ‘Non-current Assets Held for Sale and
Discontinued Operations) or distribution. The cost of investment includes transaction
costs.
The policy for the recognition and measurement of impairment losses is in accordance
with Note 3.6 to the financial statements. On disposal, the difference between the net
disposals proceeds and its carrying amount is recognised as gain or loss on disposal
in profit or loss.