AL-SALAM REIT ANNUAL REPORT 2018

AL-SALĀM REIT ANNUAL REPORT 2018 118 Subsidiaries are consolidated when the Fund obtains control over the subsidiary and ceases when the Fund loses control of the subsidiary. All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full. When the Group loses control of a subsidiary, a gain or loss calculated as the diference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets and liabilities of the subsidiary and any non-controlling interest, is recognised in proit or loss. The subsidiary’s cumulative gain or loss which has been recognised in other comprehensive income and accumulated in equity are reclassiied to proit or loss or where applicable, transferred directly to undistributed income. The fair value of any investment retained in the former subsidiary at the date control is lost is regarded as the cost on initial recognition of the investment. Business Combinations Acquisitions of subsidiaries are accounted for by applying the acquisition method. Identiiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services are received. In business combinations achieved in stages, previously held equity interests in the acquiree are re-measured to fair value at the acquisition date and any corresponding gain or loss is recognised in proit or loss. Any excess of the sumof the fair value of the consideration transferred in the business combination, 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 identiiable assets and liabilities is recorded as goodwill in the statement of inancial position. In instances where the latter amount exceeds the former, the excess is recognised as a gain on bargain purchase in proit or loss on the acquisition date. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. Subsidiary A subsidiary is an entity over which the Group has all the following: (i) Power over the investee (such as existing rights that give it the current ability to direct the relevant activities of the investee); (ii) Exposure, or rights, to variable returns from its involvement with the investee; and (iii) The ability to use its power over the investee to afect its returns. In the Fund’s separate inancial statements, investments in subsidiaries are accounted for at cost less impairment losses if any. On disposal of such investments, the diference between net disposal proceeds and their carrying amounts is included in proit or loss. Foreign Currency The inancial statements of the Group and of the Fund are presented in Ringgit Malaysia (“RM”), the currency of the primary economic environment in which the Group operates (its functional currency). In preparing the inancial statements of the Fund and its subsidiary, transactions in currencies other than the functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary