2012 Annual Report - Media Prima Berhad

Media Prima Berhad
Summary of Significant
Accounting Policies
for the financial year ended 31 December 2012
B
BASIS OF CONSOLIDATION (CONTINUED)
(a)
Subsidiaries (continued)
All earnings and losses of the subsidiary are attributed to the parent and the non-controlling interest, even if
the attribution of losses to the non-controlling interest results in a debit balance in the shareholders’ equity.
Profit or loss attribution to non-controlling interests for prior years is not restated.
The Group applies predecessor accounting to account for business combinations under common control. Under
the predecessor accounting assets and liabilities acquired are not restated to their respective fair values but at
the carrying amounts from the consolidated financial statements of the ultimate holding company of the Group
and adjusted to ensure uniform accounting policies of the Group. The difference between any consideration
given and the aggregate carrying amounts of the assets and liabilities (as of the date of the transaction) of the
acquired entity is recorded as an adjustment to retained earnings. No additional goodwill is recognised.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated. This may indicate an impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
The gain or loss on disposal of a subsidiary is the difference between net disposal proceeds and the Group’s
share of its net assets as of the date of disposal including the cumulative amount of any exchange differences
that relate to the subsidiary is recognised in profit or loss attributable to the parent.
(b)
Associates
Associates are those corporations, partnerships or other entities in which the Group exercises significant
influence, but which it does not control, generally accompanying a shareholding of between 20% and 50% of
the voting rights. Significant influence is the power to participate in the financial and operating policy decisions
of the associates but not the power to exercise control over those policies.
Investments in associates are accounted for using the equity method of accounting and are initially recognised
at cost. The Group’s investment in associates includes goodwill identified on acquisition, net of any accumulated
impairment losses.
The Group’s share of its associates’ post-acquisition profits or losses is recognised in the profit or loss, and its
share of post-acquisition movements in reserves is recognised in other comprehensive income. The cumulative
post-acquisition movements are adjusted against the carrying amount of the investment. If the Group’s share of
losses of an associate equals or exceeds its interest in the associate, the Group discontinues recognising its
share of further losses. The interest in an associate is the carrying amount of the investment in the associate
under the equity method together with any long-term interests that, in substance, form part of the Group’s net
investment in the associate. After the Group’s interest is reduced to zero, additional losses are provided for, and
a liability is recognised, only to the extent that the investor has incurred legal or constructive obligations or
made payments on behalf of the associate. If the associate subsequently reports profits, the Group resumes
recognising its share of those profits only after its share of the profits equals the share of losses not recognised.
Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the
Group’s interest in the associates and unrealised losses are also eliminated unless the transaction provides
evidence of impairment of the asset transferred.
158
annual
report
2012