Annual Report 2012 - Dialog

Acquisition-related costs are expensed as incurred.
Annual Report 2012 l Dialog Axiata PLC l 59
When initial accounting for a business combination is incomplete by the end of the reporting period in which the combination
occurs, the Group reports in the financial statements provisional amounts for the items for which the accounting is
incomplete. During the measurement period, the Group retrospectively adjusts the provisional amounts recognised at the
acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date
and, if known, would have affected the measurement of the amounts recognised as of that date. During the measurement
period, the Group also recognises additional assets or liabilities if new information is obtained about facts and circumstances
that existed as of the acquisition date and, if known, would have resulted in the recognition of those assets and liabilities as
of that date. The measurement period ends as soon as the Group receives the information it was seeking about facts and
circumstances that existed as of the acquisition date or learns that more information is not obtainable. The measurement
period shall not exceed one year from the acquisition date.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity
interest in the acquiree is remeasured to fair value at the acquisition date through the statement of comprehensive income.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is deemed to be an asset or a liability is recognised in
accordance with LKAS 39, in the statement of comprehensive income. Contingent consideration that is classified as equity
is not remeasured, and its subsequent settlement is accounted for within equity.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of noncontrolling
interest over the net identifiable assets acquired and liabilities assumed.If this consideration is lower than the fair
value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in
the statement of comprehensive income.
Investments in subsidiaries are accounted for at cost less impairment. Cost is adjusted to reflect changes in consideration
arising from contingent consideration amendments. Cost also includes directly attributable costs of investment.
Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated.
Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated. Accounting
policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
The financial periods of the subsidiary undertakings are same as that of the Company.
When the Group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when
control is lost, with the change in carrying amount recognised in profit or loss in the statement of comprehensive income.
The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an
associate, joint venture or financial asset. In addition, any amounts previously recognised as other comprehensive income
in the statement of comprehensive income in respect of that entity are accounted for as if the Group had directly disposed
of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are
reclassified to profit or loss.