Annual Report 2011 (Part I) - Wawasan TKH Holdings Berhad

WAWASAN TKH HOLDINGS BERHAD (540218-A) • ANNUAL REPORT 2011
043
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2011 (cont’d)
4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
4.6 Investments in subsidiaries
A subsidiary is an entity in which the Group and the Company have power to control the financial and
operating policies so as to obtain benefits from its activities. The existence and effect of potential voting
rights that are currently exercisable or convertible are considered when assessing whether the Group
has such power over another entity.
An investment in subsidiary, which is eliminated on consolidation, is stated in the Company’s separate
financial statements at cost. Investments accounted for at cost shall be accounted for in accordance
with FRS 5 Non-current Assets Held for Sale and Discontinued Operations when they are classified as
held for sale (or included in a disposal group that is classified as held for sale) in accordance with FRS 5.
When control of a subsidiary is lost as a result of a transaction, event or other circumstance, the Group
would derecognise all assets, liabilities and non-controlling interests at their carrying amounts and to
recognise the fair value of the consideration received. Any retained interest in the former subsidiary is
recognised at its fair value at the date control is lost. The resulting difference is recognised as a gain or
loss in profit or loss.
4.7 Intangible assets
(a) Goodwill
Goodwill recognised in a business combination is an asset at the acquisition date and is initially
measured at cost being the excess of the sum of the consideration transferred, the amount of any
non-controlling interest in the acquiree and the fair value of the acquirer’s previously held equity interest
(if any) in the entity over net of the acquisition-date amounts of the identifiable assets acquired
and the liabilities assumed.
If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets
exceeds the sum of the consideration transferred, the amount of any non-controlling interest in the
acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any),
the excess is recognised immediately in profit or loss as a bargain purchase gain.
After initial recognition, goodwill is measured at cost less accumulated impairment losses, if any.
Goodwill is not amortised but instead tested for impairment annually or more frequently if events or
changes in circumstances indicate that the carrying amount may be impaired. Gains and losses on
the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
(b) Intangible assets
Intangible assets, other than goodwill, that are acquired by the Group are stated at cost less any
accumulated impairment loss.
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the
future economic benefits embodied in the specific asset to which it relates. All other expenditures
are expensed as incurred.
Intangible assets with indefinite useful lives are tested for impairment annually and whenever there
is an indication that they may be impaired. Intangible assets with indefinite useful life of the Group
are trademarks.
An intangible asset is derecognised on disposal or when no future economic benefits are expected
from its use. The gain or loss arising from the derecognition determined as the difference between
the net disposal proceeds, if any, and the carrying amount of the asset is recognised in profit or loss
when the asset is derecognised.