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2. SigniFiCAnt ACCounting PoliCieS (Cont’D)
2.2 Summary of significant accounting policies (cont’d)
(b) Associates (cont’d)
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any long-term
interests that, in substance, form part of the Group’s net investment in the associates, the Group does not recognise further
losses, unless it has incurred obligations or made payments on behalf of the associate.
The most recent available audited financial statements of the associates are used by the Group in applying the equity
method. Where the dates of the audited financial statements used are not coterminous with those of the Group, the share
of results is arrived at from the last audited financial statements available and management financial statements to the end
of the accounting period. Uniform accounting polices are adopted for like transactions and events in similar circumstances.
In the Company’s separate financial statements, investments in associates are stated at cost less impairment losses.
On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is recognised in
the income statement.
(c) Jointly controlled entities
A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject
to joint control, and a jointly controlled entity is a joint venture that involves the establishment of a separate entity in which
each venturer has an interest.
The investment in jointly controlled entities are stated at cost less impairment losses. Shareholders’ advances to a jointly
controlled entity for which settlement is neither planned nor likely to occur in the foreseeable future is treated as part of
the investment in that entity.
Investments in jointly controlled entities are accounted for in the consolidated financial statements using the equity method
of accounting as described in Note 2.2(b).
The most recent available audited financial statements of the jointly controlled entities are used by the Group in applying
the equity method. Where the dates of the audited financial statements used are not coterminous with those of the Group,
the share of results is arrived at from the last audited financial statements available and management financial statements
to the end of the accounting period. Uniform accounting polices are adopted for like transactions and events in similar
circumstances.
In the Company’s separate financial statements, investments in jointly controlled entities are stated at cost less impairment
losses.
On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is recognised in
the income statement.
(d) intangible assets
(i) goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of business
combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent
liabilities. Following the initial recognition, it is measured at cost less any accumulated impairment losses. Goodwill is
not amortised but is instead reviewed for impairment, annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired. Gains and losses on the disposal of an entity include
the carrying amount of goodwill relating to the entity sold.
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SapuraCrest Petroleum Berhad
Annual Report 2010