NOTES TO THE FINANCIAL STATEMENTS
31 December 2014
2.
Summary of significant accounting policies (cont’d)
2.5 Subsidiary companies
A subsidiary is an investee that is controlled by the Group. The Group controls an investee when it is exposed, 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 the Company’s separate financial statements, investments in subsidiary companies are accounted for at cost less any
impairment losses.
2.6 Basis of consolidation and business combinations
A)
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiary companies
as at the end of the reporting period. The financial statements of the subsidiary companies used in the preparation of
the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting
policies are applied to like transactions and events in similar circumstances.
All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions
and dividends are eliminated in full.
A change in the ownership interest of a subsidiary company, without a loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary company, it:
– de-recognises the assets (including goodwill) and liabilities of the subsidiary company at their carrying amounts
at the date when control is lost;
– de-recognises the carrying amount of any non-controlling interest;
– de-recognises the cumulative translation differences recorded in equity;
– recognises the fair value of the consideration received;
– recognises the fair value of any investment retained;
– recognises any surplus or deficit in profit or loss; and
– re-classifies the Group’s share of components previously recognised in other comprehensive income to profit or
loss or accumulated profits, as appropriate.
Hock Lian Seng Holdings Limited
Annual report 2014
49
