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Datasonic Group Berhad
(Company No. 809759-X)
80
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended 31 March 2016
(Continued)
3.
BASIS OF PREPARATION (CONT’D)
3.2 BASIS OF CONSOLIDATION (CONT’D)
(a) Merger Accounting for Common Control Business Combinations (Cont’d)
The assets and liabilities combined are accounted for based on the carrying amounts from
the perspective of the common control shareholder at the date of transfer. No amount is
recognised in respect of goodwill and excess of the acquirer’s interest in the net fair value
of the acquiree’s identifiable assets and liabilities and contingent liabilities over cost at
the time of the common control business combination to the extent of the continuation
of the interests of the controlling party or parties.
When the merger method is used, the cost of investment in the Company’s books is
recorded at the nominal value of shares issued. The difference between the carrying
value of the investment and the nominal value of the shares of the subsidiaries is treated
as a merger deficit or merger reserve as applicable. The results of the subsidiaries being
merged are included for the full financial year.
(b) Acquisition Method of Accounting for Non-common Control Business Combinations
Acquisitions of businesses are accounted for using the acquisition method. Under the
acquisition method, the consideration transferred for acquisition of a subsidiary is the fair
value of the assets transferred, liabilities incurred and the equity interests issued by the
Group at the acquisition date. The consideration transferred includes the fair value of any
asset or liability resulting froma contingent consideration arrangement. Acquisition-related
costs, other than the costs to issue debt or equity securities, are recognised in profit or loss
when incurred.
In a business combination achieved in stages, previously held equity interests in the
acquiree are remeasured to fair value at the acquisition date and any corresponding
gain or loss is recognised in profit or loss.
Non-controlling interests in the acquiree may be initially measured either at fair value or
at the non-controlling interests’ proportionate share of the fair value of the acquiree’s
identifiable net assets at the date of acquisition. The choice of measurement basis is made
on a transaction-by-transaction basis.
(c) Non-controlling Interests
Non-controlling interests are presented within equity in the consolidated statement of
financial position, separately from the equity attributable to owners of the Company.
Profit or loss and each component of other comprehensive income are attributed to the
owners of the Company and to the non-controlling interests. Total comprehensive income
is attributed to non-controlling interests even if this results in the non-controlling interests
having a deficit balance.
At the end of each financial year, the carrying amount of non-controlling interests is the
amount of those interests at initial recognition plus the non-controlling interests’ share of
subsequent changes in equity.
(d) Changes in Ownership Interests in Subsidiaries Without Change of Control
All changes in the parent’s ownership interest in a subsidiary that do not result in a loss of
control are accounted for as equity transactions. Any difference between the amount
by which the non-controlling interest is adjusted and the fair value of consideration paid
or received is recognised directly in equity of the Group.