Annual Report 2012 - ecoWise Holdings Limited

ecoWise Holdings Limitedannual report 20127131 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Intangible Assets (Continued)GoodwillGoodwill is recognised as of the acquisition date measured as the excess of (a) over (b) whereby (a) beingthe aggregate of (i) the consideration transferred measured at acquisition date fair value; (ii) the amount ofany non-controlling interests in the acquiree measured either at fair value or at the non-controlling interests’proportionate share of the acquiree’s net identifiable assets; and (iii) in a business combination achieved instages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree; and(b) being the net of the identifiable assets acquired and the liabilities assumed measured at acquisition datefair values.After initial recognition, goodwill acquired in a business combination is measured at cost less anyaccumulated impairment losses. Goodwill is not amortised. Irrespective of whether there is any indicationof impairment, goodwill is tested for impairment at least annually. Impairment on goodwill is not reversedin any circumstances.For the purpose of impairment testing and since the acquisition date of the business combination, goodwill isallocated to each cash-generating unit, or groups of cash-generating units that are expected to benefit fromthe synergies of the business combination, irrespective of whether other assets or liabilities of the acquireewere assigned to those units or groups of units. Each unit or group of units to which the goodwill is allocatedrepresents the lowest level within the Group at which the goodwill is monitored for internal managementpurposes and is not larger than a segment.SubsidiariesA subsidiary is an entity including unincorporated and special purpose entity that is controlled by the Group.Control is the power to govern the financial and operating policies of an entity so as to obtain benefits fromits activities accompanying a shareholding of more than one half of the voting rights or the ability to appointor remove the majority of the members of the board of directors or to cast the majority of votes at meetingsof the board of directors. The existence and effect of potential voting rights that are currently exercisable orconvertible are considered when assessing whether the Group controls another entity.In the Company’s own separate financial statements, the investments in subsidiaries are stated at cost lessany allowance for impairment in value. Impairment loss recognised in the profit or loss for a subsidiary isreversed only if there has been a change in the estimates used to determine the asset’s recoverable amountsince the last impairment loss was recognised.