AnnuAl report 2010 - Walter Meier

34 / Consolidated FinanCial statements
Walter Meier / annual report 2010
in comparison with the requirements described above, the following divergent principles applied before
January 1, 2010:
– acquisition of non-controlling interests were accounted for using the parent entity extension method,
whereby, the difference between the consideration and the book value of the share of the net assets
acquired were recognized in goodwill.
– losses incurred were attributed to the non-controlling interest until the balance was reduced to nil. any
further excess losses were attributed to the parent.
– upon loss of control, the Group accounted for the investment retained at its proportionate share of net
asset value at the date control was lost.
associated companies
associated companies are companies in which Walter Meier has significant influence but not control and,
as a rule, holds between 20 and 50 percent of the voting rights directly or indirectly.
interests in associated companies are accounted for using the equity method and initially reported at the
cost of purchase. any existing goodwill as well as any adjustments to the recoverable amount are included
in the carrying amount of the interests.
the pro rata profit or loss of associated companies is recorded in the consolidated income statement. if the
share in the losses of an associated company equals or exceeds its carrying amount, additional pro rata
losses are only taken into account and reported as a liability to the extent to which Walter Meier has
incurred legal or de facto commitments or made payments for the associated company.
unrealized gains on transactions between Walter Meier and the associated company are eliminated
according to the interests in the associated company. unrealized losses on transactions between Walter
Meier and the associated company are eliminated, using the equity method, according to the interests in
the associated company, except where the transaction suggests an impairment in the interests. if associated
companies use different accounting methods to those of Walter Meier for similar transactions and
events, their accounting policies were adjusted.
upon loss of significant influence over the associate, the Group measures all investments, which it retains
in the former associated company, at fair value. Differences between the carrying amount of the associate
upon loss of significant influence and the fair value of the retained investment as well as disposal proceeds
fare recorded in the consolidated income statement.
interests in joint ventures
the Group has an interest in a joint venture which is a jointly controlled company. accordingly, a contractual
agreement exists between the partner companies establishing joint control over the company’s
economic activities. the interests in the joint venture as well as pro rata profits or losses arising therefrom
are treated in the same way as those from associated companies.
the financial statements of the joint venture are prepared on the same balance sheet date as the financial
statements of Walter Meier ltd.. Where necessary, adjustments are made to bring the accounting policies
in line with those of the Group.
upon loss of joint control and subject to the precondition that the former joint venture does not become
an affiliated company or an associated company, Walter Meier measures the remaining investment at its
fair value. Differences between the carrying amount of the former jointly controlled entity upon loss of
joint control and the fair value of the remaining investment as well as the disposal proceeds are recorded
in the consolidated income statement. if the remaining investment conveys significant influence, it is
accounted for as an investment in an associated company.