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KD Holding Group
Notes to Consolidated Financial Statements as at and for the year ended 31 December 2007
- IAS 27, Consolidated and Separate Financial
Statements (effective from annual periods beginning
2.2 Consolidated Financial Statements
2.2.1 Subsidiaries
on or after 1 July 2009). IAS 27 (revised) requires
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the effects of all transactions with non-controlling
interests to be recorded in equity if there is no change
in control. They will no longer result in goodwill or
gains and losses. The standard also specifies the
accounting when control is lost. Any remaining
interest in the entity is remeasured to fair value and a
gain or loss is recognised in profit or loss.
- IFRIC 11, IFRS 2, Group Treasury Share
Transactions (effective from periods beginning on
or after 1 March 2007). The Group does not grant
shares or share options to employees, consequently
the interpretation will not affect the Group’s financial
statements.
- IFRIC 12, Service Concession Agreements (effective
from periods beginning on or after 1 January
2008). The interpretation will not affect the Group’s
financial statements.
- IFRIC 13, Customer Loyalty Programmes (effective
from 1 January 2008). IFRIC 13 clarifies that where
goods or services are sold together with a customer
loyalty incentive (for example loyalty points or
free product). IFRIC 13 will not affect the Group’s
financial statement because none of the Group’s
companies operate any loyalty programmes.
- IFRIC 14, IAS 19, The Limit on a Defined Benefit
Asset, Minimum Funding Requirements and their
Interaction (effective from 1 January 2008).
Subsidiaries are those companies in which the
Company and its subsidiaries hold, directly or indirectly,
more than one half of voting rights. Subsidiaries are
fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from
the date on which control of the Company ceases.
The purchase method of accounting is used to
account for the acquisition of subsidiaries. The
cost of an acquisition is measured as the fair value
of the assets given, equity instruments issued
and liabilities incurred or assumed at the date of
exchange, plus costs directly attributable to the
acquisition. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business
combination are measured initially at fair values
at the acquisition date. The excess of the cost of
acquisition over the fair value of the Group’s share
of the identifiable assets, liabilities and contingent
liabilities is recorded as goodwill. If the cost of
acquisition is less than the fair value of the Group’s
share of net assets acquired, the difference is
recognised directly in the income statement.
Inter-company transactions, balances and unrealised
gains on transactions as well as income, expenses and
dividends between group companies are eliminated.
Subsidiaries’ accounting policies have been changed
or adequately adjusted where necessary to ensure
consistency with the policies adopted by the Group.