Annual Report 2006 - Thai Beverage Public Company Limited

2. Basis of preparation of the financial statementsThe financial statements issued for Thai reporting purposes are prepared in the Thai language. This English translation ofthe financial statements has been prepared for the convenience of readers not conversant with the Thai language.The financial statements are prepared in accordance with Thai Accounting Standards (“TAS”) including related interpretationsand guidelines promulgated by the Federation of Accounting Professions (“FAP”) and with generally accepted accountingprinciples in Thailand.The financial statements are presented in Thai Baht, rounded in the notes to the financial statements to the nearest million,unless otherwise stated. They are prepared on the historical cost basis except for the following assets which are stated atfair value: land and investments in available-for-sale securities.The preparation of financial statements in conformity with TAS requires management to make judgements, estimates andassumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Theestimates and associated assumptions are based on historical experience and various other factors that are believed to bereasonable under the circumstances, the results of which form the basis of making the judgements about carrying amountsof assets and liabilities that are not readily apparent from other sources.The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognisedin the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision andfuture periods, if the revision affects both current and future periods.3. Significant accounting policies(a) Basis of consolidationThe consolidated financial statements relate to the Company and its subsidiaries (together referred to as the “Group”) andthe Group’s interest in associates.Significant intra-group transactions between the Company and its subsidiaries are eliminated on consolidation.SubsidiariesSubsidiaries are those companies controlled by the Company. Control exists when the Company has the power, directly orindirectly, to govern the financial and operating policies of a company so as to obtain benefits from its activities. The financialstatements of subsidiaries are included in the consolidated financial statements from the date that control commences untilthe date that control ceases.121AssociatesAssociates are those companies in which the Group has significant influence, but not control, over the financial and operatingpolicies. The consolidated financial statements include the Group’s share of the total recognised gains and losses ofassociates on an equity accounted basis, from the date that significant influence commences until the date that significantinfluence ceases. When the Group’s share of losses exceeds its interest in an associate, the Group’s carrying amount is