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Notes to the Financial StatementsFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 20094 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(a)Economic entities in the Group (continued)(i) Subsidiaries (continued)The Group has taken advantage of the exemption provided by FRS 122 2004and FRS 3 to apply theseStandards prospectively. Accordingly, business combinations entered prior to the respective effective dateshave not been restated to comply with these standards.Under the predecessor method of merger accounting, the results of subsidiaries are presented as if themerger had been effected throughout the current and previous years. The assets and liabilities combined areaccounted for based on the carrying amounts from the perspective of the common control shareholder atthe date of transfer. On consolidation, the cost of the merger is cancelled with the values of the sharesreceived. Any resulting credit difference is classified as equity and regarded as a non-distributable reserve.Any resulting debit difference is adjusted against any suitable reserve. Any share premium, capital redemptionreserve and any other reserves which are attributable to share capital of the merged enterprises, to theextent that they have not been capitalised by a debit difference, are reclassified and presented as movementin other capital reserves.Under the purchase method of accounting, subsidiaries are fully consolidated from the date on which controlis transferred to the Group and are excluded from consolidation from the date that control ceases. The costof an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilitiesincurred 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 aremeasured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest.The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assetsacquired at the date of acquisition is recorded as goodwill. If the cost of acquisition is less than the fair valueof the net assets of the subsidiary acquired, the difference is recognised directly in the Consolidated IncomeStatement.Minority interests represent that portion of the profit or loss and net assets of subsidiaries attributable toequity interest that are not owned, directly or indirectly through the subsidiaries by the parent. It is measuredat the minorities’ share of the fair values of the subsidiaries’ identifiable assets and liabilities at the acquisitiondate and the minorities’ share of changes in subsidiaries’ equity since that date. Separate disclosure is madeof minority interests.Where more than one exchange transaction is involved, any adjustment to the fair value of the subsidiary’sidentifiable assets, liabilities and contingent liabilities relating to previously held interests of the Group isaccounted for as a revaluation.Axiata Group Berhad • 178